CFPB Targets Debt Collectors, Consumer Reporting Agencies, Mortgage Companies, Payday Lenders & Others

Earlier this year, the Consumer Financial Protection Bureau expanded its bank supervisory program to include nonbanks, companies “that offer or provide consumer financial products or services but [do] not have a bank, thrift, or credit union charter.” Since that time, the agency has begun to provide greater detail on the nonbanks it is monitoring and the fraudulent practices they are committing.

For your reference, here’s a roundup of recent legal commentary on the institutions and issues the CFPB is targeting: 

Debt Collectors & Consumer Reporting Agencies…

CFPB Issues Proposed Rule Defining “Larger Participants” for Certain Consumer Financial Markets (Morrison & Foerster LLP)

“… the Consumer Financial Protection Bureau (‘CFPB’) issued a proposed rule defining certain ‘larger participants’ in nonbank markets for consumer financial products or services… Specifically, the proposed rule only applies to debt collector and consumer reporting agency markets. In selecting these two markets for its initial rulemaking, the CFPB noted the considerable impact that debt collectors and consumer reporting agencies have on American consumers.” Read more»

CFPB Proposes “Larger Participant” Rule to Supervise Consumer Reporting and Debt Collection Companies (Venable LLP)

“For the consumer reporting market, the CFPB has stated that the rule would capture: (1) the largest credit bureaus selling comprehensive consumer reports; (2) consumer report resellers; and (3) specialty consumer reporting agencies. The debt collection firms covered by the rule, according to the CFPB, would include: (1) firms that collect debt owed by another company for a fee; (2) firms that buy debt and collect the proceeds for themselves; and (3) debt collection attorneys and law firms that collect through litigation. The CFPB has explained that although it considered identifying these different business models as separate markets, it ultimately chose to define them as a single consumer reporting market and consumer debt collection market based on current available data.” Read more»

Debt Collection To Be Regulated by CFBP (Francis Riley)

“While the proposed rule does not cover all debt collectors and consumer reporting agencies, it covers most of them. The proposed rule would cover debt collectors (along with debt buyers and collection law firms) with more than $10 million in annual receipts from debt collection activities. This covers about 175 firms, or two-thirds of the debt collection market. The proposed rule would also cover consumer reporting agencies that earn more than $7 million annually. This covers about 30 firms, which accounts for more than 90 percent of the consumer credit reporting market.” Read more»

Mortgage Lenders and Servicers…

Financial Services Legislative And Regulatory Update — February 21, 2012 (Mintz Levin – Public Finance)

“… the CFPB published a prototype mortgage statement to require lenders and servicers to share more detailed information about costs and features of borrowers‘ loans. The prototype includes monthly payment analysis to clarify how much money is put toward loan principal, interest and fees. Statements would also include information on housing counseling and loan servicer contact information for borrowers with financial difficulties.” Read more»

Corporate and Financial Weekly Digest – January 13, 2012 (Katten Muchin Rosenman LLP)

“On January 11, the Consumer Financial Protection Bureau (CFPB) released a new examination manual entitled Mortgage Origination Examination Procedures… The release of the manual marks an initial step in regulating entities in the mortgage business that were not subject to federal regulation prior to passage of the Dodd-Frank Act. Such entities include independent lenders, brokers, servicers and others unaffiliated with banks and depository institutions.” Read more»

Payday Lenders…

CFPB Issues Examination Procedures for Short-Term, Small-Dollar Loans (Katten Muchin Rosenman LLP)

“In conjunction with remarks this afternoon by Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), the CFPB has released an examination procedure for short-term, small-dollar lending. The guidelines set forth the agency’s examination objectives and provide an outline of the ‘modules’ that examiners will use in five examination areas: 1. Marketing; 2. Application and Origination of Loans; 3. Payment Processing and Sustained Use; 4. Collection, Accounts in Default, and Consumer Reporting; and 5. Third-Party Relationships (i.e., privacy and safeguards).” Read more»

Consumer Credit Card Providers…

CFPB Amends Complaint Manual; Banks Will Be Subject to Public Complaints on Credit Cards (Katten Muchin Rosenman LLP)

“The Consumer Financial Protection Bureau (CFPB), which has been taking complaints from consumers over its internet page, has updated its Complaint Systems Manual. The manual addresses how institutions should handle complaints received from consumers on credit cards and mortgages. In addition to more detail, the updated manual now allows an institution 15 days instead of 10 within which to give an initial response to a complaint, although the CFPB made it clear that this expected timeframe would not supersede any laws that require an earlier response.” Read more»

Money Transmitters…

CFPB Issues Final Remittance Transfer Regulations Under Dodd-Frank Act (Davis Wright Tremaine LLP)

“On Jan. 20, 2011, the Consumer Financial Protection Bureau (CFPB or Bureau) released its long-anticipated rules governing certain electronic money transfers or ‘remittance transfers.’ The new ‘remittance transfer’ rules implement provisions of Dodd-Frank by imposing—for the first time—federally mandated disclosure, error resolution and cancellation rights on remittance transfer providers, which can include both financial and non-financial institutions. Non-depository financial institutions such as money transmitters, which have been traditionally governed principally by state law (except for federal Bank Secrecy Act requirements), will now be subject to these new federal rules.” Read more»

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See also

CFPB and FTC to Coordinate on Oversight of Financial Products and Services (Loeb & Loeb LLP) 

Consumer Financial Protection Bureau Opens Whistleblower Complaint Hotline (Venable LLP) 

CFPB Launches Nonbank Supervisory Program 

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