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CFPB Creates Ombudsman’s Office

January 10, 2012

Authors

Bryan Cave

CFPB Creates Ombudsman’s Office

January 10, 2012

by: Bryan Cave

The Consumer Financial Protection Bureau has created an ombudsman’s office to help resolve individual and systemic problems that banks, nonbanks and consumers have with the bureau. The announcement states that depository or non-depository entity that the CFPB supervises may use the Ombudsman’s Office when they have not had success with the existing CFPB processes, or to achieve an informal resolution. Further information may be found at http://www.consumerfinance.gov/ombudsman/#FAQ.

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CFPB Issues Guidance on Confidential Supervisory Info

January 9, 2012

Authors

Bryan Cave

CFPB Issues Guidance on Confidential Supervisory Info

January 9, 2012

by: Bryan Cave

The CFPB recently issued guidance on the treatment of confidential supervisory information.  CFPB Bulletin 12-01 states that once the bureau issues a request for information, supervised financial institutions (i.e., those with total assets of more than $10 billion) are required to provide all documents and other information responsive to the request.  The bulletin adds:

Supervised institutions may not selectively withhold responsive documents based on their judgment that such materials are not necessary to the Bureau’s execution of its responsibilities or that other materials would be sufficient to suit the Bureau’s needs. The supervisory process is based on the supervisor’s full and unfettered access to information, and the supervisor is entitled – indeed, duty bound–to ensure that it thoroughly understands the institution in question and has access to all information that, in its independent judgment, may bear on its supervisory responsibilities.

The Bulletin argues that providing requested information to the

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CFPB Republishes Regs E, P and Z

January 9, 2012

Authors

Bryan Cave

CFPB Republishes Regs E, P and Z

January 9, 2012

by: Bryan Cave

The CFPB is republishing regulations for which it is assuming authority from other agencies pursuant to the Dodd-Frank Act and making technical and conforming changes to reflect the transfer of authority and other changes required by the act. Among others, the CFPB issued interim final rules with request for public comment for the Federal Reserve’s Regulation E (Electronic Fund Transfers, Regulation P (Privacy of Consumer Financial Information) and Regulation Z (Truth in Lending).

The preambles to the interim final rules state that the regulations do not impose any new substantive obligations on persons subject to the existing regulations as published by the Federal Reserve.

The interim final rules became effective Dec. 30, 2011. The Reg E interim final rule is available at http://www.gpo.gov/fdsys/pkg/FR-2011-12-27/pdf/2011-31725.pdf; comments are due by Feb. 27, 2012. Reg P is available at http://www.gpo.gov/fdsys/pkg/FR-2011-12-21/pdf/2011-31729.pdf; comments are due by Feb. 21, 2012. Reg Z is available at

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President Obama Appoints Cordray in Recess Appointment

January 9, 2012

Authors

Bryan Cave

President Obama Appoints Cordray in Recess Appointment

January 9, 2012

by: Bryan Cave

President Obama recently announced his recess appointment of former Ohio Attorney General Richard Cordray to head the CFPB. This came despite the fact that the Senate held a series of “pro forma” sessions held over the congressional recess in an attempt to preclude a recess appointment. In response, the President dismissed the procedural requirements of a recess appointment, calling the pro forma sessions ‘gimmicks.’

Insiders have speculated some consequences of the recess appointment, including retaliation by Republicans in holding up the nominations of other agency heads. But more importantly, litigation is likely to stem from Cordray’s appointment, calling into question whether the specific requirements for a recess appointment were met. There is also the technical issue of whether the Dodd-Frank Act requirement of a “Senate-confirmed director” is met, which is key in establishing the CFPB’s authority over nonbanks. Despite Cordray’s appointment, it is unclear whether the bureau can legally exercise

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The CFPB Publishes Its First Examination Manual

October 24, 2011

Authors

Robert Klingler

The CFPB Publishes Its First Examination Manual

October 24, 2011

by: Robert Klingler

The CFPB published its Supervision and Examination Manual (the “Manual”) on October 13, 2011, designed to provide CFPB examiners with direction on how to determine if providers of consumer financial products are complying with consumer protection laws. The CFPB’s press release states that the Manual incorporates procedures already used by other federal regulators. The Manual does simply recite certain interagency procedures, such as for fair lending examinations. At the same time, the Manual addresses new Dodd-Frank concepts, such as unfair, deceptive and abusive acts or practices.

The CFPB will use the Manual initially to supervise the more than 100 large banks, thrifts, and credit unions that are subject to the CFPB’s examination authority pursuant to the Dodd-Frank Act (those with total assets over $10 billion, as well as their affiliates). The Bureau’s examiners will also ultimately use the Manual to supervise non-depository consumer financial service companies (e.g., mortgage

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The CFPB Busily Restating Regulations

October 21, 2011

Authors

Robert Klingler

The CFPB Busily Restating Regulations

October 21, 2011

by: Robert Klingler

No, nothing to worry about yet, though it may be confusing for some time. One bureaucratic consequence of the Dodd-Frank Act moving the various consumer protection laws and regulations under the jurisdiction of the Consumer Financial Protection Bureau (CFPB) is that they now must reissue the relevant regulations.

Referred to by CFPB insiders as the “restatement project,” the CFPB is preparing to reissue over 3,000 pages of regulations through approximately fourteen Federal Register notices. The reissued regulations will be changed to reflect jurisdictional changes and some scope changes, but they are not expected to change substantively at this time (although we will be watching). We expect publication of these reissued regulations to begin within days.

The possible source of confusion will be a new numbering system. The regulations will still be in Title 12 of the Code of Federal Regulations, but moved to Chapter X. We understand that

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The Quest for a Single, Integrated Mortgage Loan Disclosure

October 14, 2011

Authors

Bryan Cave

The Quest for a Single, Integrated Mortgage Loan Disclosure

October 14, 2011

by: Bryan Cave

The Consumer Financial Protection Bureau (CFPB) has moved into its fourth round of testing of a new consumer mortgage loan disclosure.  Acting under the mandate of the Dodd-Frank Act, the CFPB is preparing a single, integrated disclosure to address the disclosure requirements of both the Truth in Lending Act and Real Estate Settlement Procedures Act.

The specific focus of this fourth round of testing is comparison shopping.  Consumers and the lending industry have been asked to compare two different types of loan products using the same version of the form.  The CFPB states that it wants to be sure that the disclosure actually helps consumers to understand the features of competing loan products, from the overall loan amount to estimates of tax and insurance costs.

The CFPB’s efforts in this area have generally met with approval from all interested parties.  The proposed form is more clear, concise and informative than

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Financial Services Update – July 29, 2011

August 3, 2011

Authors

Matt Jessee

Financial Services Update – July 29, 2011

August 3, 2011

by: Matt Jessee

Q2 GDP Announced

On Friday, the Commerce Department released its report on the country’s gross domestic product for the second quarter showing that the GDP grew at an annual rate of 1.3 percent, after having grown at an annual rate of 0.4 percent in the first quarter — a number that itself was revised sharply down from earlier estimates of 1.9 percent.

Senate to Hold CFPB Nomination Hearing

On Thursday, the Senate Banking Committee held a hearing on the nomination of Richard Cordray to be the new Director of the Consumer Financial Protection Bureau. While the nomination can be sent to the floor, Senate Republicans have vowed to block Cordray’s nomination and any other nominees for the directorship because they insist that the agency be run by a Commission rather than a Director and have its funding determined by Congress.

Carper/Blunt Introduce Consumer Data Security Bill

On Thursday, Sens. Tom

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Financial Services Update – June 24, 2011

June 26, 2011

Authors

Bryan Cave

Financial Services Update – June 24, 2011

June 26, 2011

by: Bryan Cave

CFPB Announces Regulatory Targets

On Thursday, the new Consumer Financial Protection Bureau (CFPB) outlined six areas that could be subject to its supervision. The six areas include debt collection; consumer reporting; consumer credit; money transmitting/check cashing; prepaid cards; and debt consolidation. The Bureau also identified automobile loans and personal loans as large sectors that could fall under its supervision. However, the Bureau is prevented from regulating non-bank firms until it has a Senate-confirmed director, a position that will be difficult to fill given Senate Republicans’ pledge to block anyone President Obama nominates for the job. Republicans have said they will block the nomination unless changes are made to the agency’s structure, including making it a five-member commission rather than headed by a single director. The CFPB is expected to officially begin operations in July.

Cantor Pulls out of Biden Debt Limit Negotiations

On Thursday, House Majority Leader Eric Cantor (R-VA)

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OCC Opines that Federal Preemption Still Exists, Despite Dodd-Frank

May 16, 2011

Authors

Bryan Cave

OCC Opines that Federal Preemption Still Exists, Despite Dodd-Frank

May 16, 2011

by: Bryan Cave

The OCC recently sent a letter to Sen. Tom Carper (D-Dela.) in response to his request for the OCC to clarify how it would interpret particular aspects of the preemption provisions of the Dodd-Frank Act.  Among other things, the letter states that federal preemption of state consumer protection laws would continue even under Dodd-Frank, in accordance with the “Barnett” standard. Of particular interest, the OCC letter noted that Dodd-Frank did not overrule or reverse any pre-existing judicial decisions that were based on the Barnett standard and which found that the state law conflicted with bank powers.

The Dodd-Frank Act restricts the ability of national banks and federal savings associations to assert preemption from state consumer protection laws.  For example, the ability to assert “field preemption” over an entire body of law (even if there is no conflict) no longer exists. However, contrary to some assertions, preemption is not “dead.” 

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