CFPB Resource Center
On July 21, 2011, the Consumer Financial Protection Bureau (CFPB), an agency with unprecedented power and authority to regulate the market for consumer financial products, opened its doors for business.
Because of our focus and expertise on retail banking products and services, CBA is well positioned to be your industry resource on the CFPB and will regularly update this page as the rulemaking process unfolds. In addition, our insights and analysis on CFPB-related issues, along with the latest news and information, will provide you with the necessary tools to navigate this new regulatory environment, so please visit often.
November 21, 2014
GAO Finds Deficiencies with Internal Controls at CFPB
Tuesday, November 18, 2014, the Government Accountability Office (GAO)
released their annual audit report conducted on the CFPB for the year
ending September 30, 2014. The report found the agency continues to struggle with internal controls, among other issues.
GAO found the CFPB did not have effective procedures in place to
determine and record an appropriate amount for goods and services
received but not yet paid as of September 30, 2014. Additionally, the
Bureau did not have effective review procedures to timely detect and
correct inaccuracies in the accrual amounts. The audit also found a
"significant deficiency" in accounting for property and equipment, first
reported in the 2013 audit, remained an issue in 2014.
CFPB Issues Bulletin on Illegal Burdens for Consumers Receiving Disability Income
On Tuesday, November 18, 2014, the CFPB issued
a bulletin intended to help lenders avoid imposing illegal burdens on
mortgage applicants receiving disability income. The CFPB is reminding
lenders that requiring unnecessary documentation from consumers who
receive Social Security disability income may raise fair lending risk.
The bulletin calls attention to standards and guidelines that may help
lenders comply with the law, and to help ensure that recipients of
Social Security disability income receive fair and equal access to
"Everyone deserves the opportunity to qualify for a mortgage that they can afford," said CFPB Director Richard Cordray in a press release.
"Consumers should not be put at a disadvantage just because they
receive Social Security disability income. Lenders should continue to
make fair and responsibly underwritten mortgages without imposing
unnecessary requirements on consumers who receive these benefits."
CFPB Issues Enforcement Action Against Drive Time
On Thursday, November 19, 2014, the CFPB issued a consent order
with DriveTime Automotive Group, a "Buy-Here, Pay-Here" auto dealer,
and its finance company, DT Acceptance Corporation for engaging in
unfair acts and practices, as well as fair credit reporting act (FCRA)
violations. The Bureau cited several DriveTime acts and practices as
unfair to consumers, including contacting consumers at work even after
being asked to stop calling; repeatedly calling borrower's third-party
references after being asked to stop calling; and repeatedly calling
third-parties with no connection to the borrower. The CFPB also cited
DriveTime for providing inaccurate consumer information to the credit
reporting agencies and failing to correct the information even after
disputes were filed by borrowers. DriveTime is required to end its
unfair calling practices; provide additional notices to consumers on how
to limit collection contacts; correct its data furnishing processes in
compliance with FCRA; and implement an audit program. DriveTime will pay
an $8 million civil penalty and provide impacted consumers with free
CFPB Proposes Amendments to Mortgage Servicing Rules
On Thursday, November 20, 2014, the CFPB proposed amendments to mortgage servicing rules in the 2013 Mortgage Rules under the Real Estate Settlement Procedures Act. According to a Bureau press release, the proposal would:
A summary of the proposal is available, with comments due 90 days from publication in the Federal Register.
- Require servicers to provide certain borrowers with foreclosure protections more than once over the life of the loan;
- Expand consumer protections to surviving family members and other homeowners;
- Require servicers to notify borrowers when loss mitigation applications are complete;
- Protect struggling borrowers during servicing transfers;
- Clarify servicers' obligations to avoid dual-tracking and prevent wrongful foreclosures;
- Clarify when a borrower becomes delinquent;
- Provide more information to borrowers in bankruptcy;
- Provide flexibility for servicers to comply with certain force-placed insurance and periodic statement disclosure requirements;
several early intervention, loss mitigation, information request, and
prompt crediting of payment requirements, as well as the small servicer
- Exempt servicers from providing periodic statements under certain circumstances when the servicer has charged off the mortgage.
Lawmakers Press Financial Firms on Cyber-Security
On Wednesday, November 19, 2014, Sen. Elizabeth Warren (D-MA) and Rep. Elijah Cummings (D-MD) requested
16 financial firms provide detailed information about cyber-attacks
they experienced over the past year and how they plan to prevent future
"The increasing number of cyber-attacks and data
breaches is unprecedented and poses a clear and present danger to our
nation's economic security," the lawmakers wrote in the letter. "Each
successive cyber-attack and data breach not only results in hefty costs
and liabilities for businesses, but exposes consumers to identity theft
and other fraud, as well as a host of other cyber-crimes."
and Cummings requested the firms provide information on the number of
customers potentially affected by breaches, data security measures the
companies have taken in response, the value of the fraudulent
transactions connected with the cyber-attacks, and who is suspected to
have carried them out. The letters also request IT security officers at
each firm to brief the lawmakers on how they are protecting their data.
Bill Aims to Address "Operation Choke Point" Investigation
On Thursday, November 20, 2014, Rep. Blaine Luetkemeyer (R-MO) introduced the Financial Institution Protection Act,
which seeks to end the federal government's investigation known as
"Operation Choke Point." The bill would require federal banking agencies
to put in writing any suggestion or order to terminate a customer's
banking account, and to provide material reason. The legislation also
would require federal banking agencies to issue a rule defining
"After receiving letters from the FDIC and
[U.S. Department of Justice] last week, stating the agencies own
internal investigatory departments will investigate Operation Choke
Point activities within their agencies, I am even more positive that
with the introduction of this legislation, Congress will be able to work
in a bipartisan fashion to quickly put an end to this program," Rep.
Luetkemeyer said in a press statement.
House Financial Services Subcommittee Holds Hearing on Private Flood Insurance
Thursday, November 20, 2014, the House Financial Services Subcommittee
on Housing & Insurance held a hearing to examine opportunities for
reforming the National Flood Insurance Program (NFIP), and to explore
increasing the private sector's role in the market. The subcommittee
discussed the Flood Insurance Market Parity & Modernization Act of
2014 (H.R. 4558 / S. 2381), which was sponsored in the House by Rep.
Dennis Ross (R-FL) and Patrick Murphy (D-FL).
"Section 239 of
BW-12 made clear that the intent of Congress was to allow homeowners the
option to pursue private flood insurance. Unfortunately, BW-12 narrowly
defined acceptable private flood insurance, thereby limiting the
flexibility of state regulators to license private flood products. These
restrictions prevent innovation and consumer choice," said Rep. Ross in
his opening statement.
bill would amend the Flood Disaster Protection Act of 1973 to clarify
flood insurance offered by a private carrier outside of the NFIP can
satisfy the mandatory purchase requirement. The legislation defines
acceptable private flood insurance as a policy that provides flood
insurance coverage issued by an insurance licensed company, admitted, or
otherwise approved to engage in the business of insurance in the State
or jurisdiction in which the insured property is located. The bill would
provide more certainty to lenders who are required to ensure that the
mandatory flood insurance requirements set forth in the Biggert-Waters
Act are met.
Senate Banking Committee Hears from FHFA Director Mel Watt
On Wednesday, November 19, 2014, the Senate Banking Committee held a hearing
entitled: "The Federal Housing Finance Agency (FHFA): Balancing
Stability, Growth, and Affordability in the Mortgage Market" which
included testimony from Mel Watt, the Director of the FHFA. The hearing
discussed removing Fannie and Freddie from conservatorship, the
government's role is assisting borrowers who are underwater on their
mortgage, and upcoming rulemaking.
"FHFA continues to perform
the dual role of both regulating and running the businesses of the
largest entities in the mortgage market. This is not sustainable, and
there is no consensus in Congress regarding how to move forward,"
Committee Chairman Tim Johnson (D-SD) stated in his opening. "All the
while the credit box remains extremely narrow, locking out many
potential borrowers with good credit, including first-time homebuyers
who are needed to expand and sustain our recovery. While I oppose
returning to exotic products with confusing terms, we need to find a way
to bring the pendulum back to rational underwriting."
pressed on whether he would support liquidating or spinning off Fannie
and Freddie, Director Watt replied, "That's something that will probably
have to be initiated by Treasury," Watt said. "Short term I would rule
it out. Long term I might not rule it out."
Watt also received
considerable pressure from Committee Democrats to do more to assist
struggling borrowers with their mortgage payments. Specifically, Sen.
Elizabeth Warren (D-MA) demanded answers on why FHFA has not provided
principal forgiveness to some borrowers, and cited studies on how doing
so would be profitable for FHFA by making repayment more manageable for
borrowers. "We have to do this in a way that is responsible," Watt said.
Congress Announces Calendar for 2015
This week, the U.S. House of Representatives and U.S. Senate
announced their schedules for the first session of the 114th Congress.
Although the calendars do not exactly mirror each other, there is
coordination on when each body will be in session.
Proposed Clarifications to Revised Regulatory Capital Rules
Tuesday, November 18, 2014, the Federal Reserve Board, FDIC and OCC
proposed clarifications to the revised regulatory capital rules adopted
by the agencies in July 2013. The proposal applies only to large
internationally active banking organizations which currently determine
their regulatory capital ratios under the advanced approaches rule, or
those that may use the advanced approaches rule in the future. This
largely includes those institutions with at least $250 billion in total
consolidated assets or at least $10 billion in total on-balance sheet
The proposed rule would make technical
corrections and clarify certain aspects of the advanced approaches rule,
including the qualification criteria and calculation requirements for
risk-weighted assets. Many of the proposed changes would better align
the advanced approaches rule with the Basel framework, thereby enhancing
consistency with international capital standards. Comments must be
submitted within 60 days of publication in the Federal Register.
FDIC Releases Technical Assistance Videos
On Wednesday, November 19, 2014, the FDIC released the first technical video of its three-part series
aimed at assisting bank employees with meeting regulatory requirements.
The videos will address compliance with certain mortgage rules issued
by the CFPB.
The first video covers the Ability to Repay and
Qualified Mortgage Rule, and is intended for compliance officers and
staff involved in ensuring the bank's mortgage lending operations comply
with CFPB rules.
"The release of this video is part of the
FDIC's ongoing efforts to inform supervised institutions about important
regulatory issues," said Mark Pearce, FDIC Director of the Division of
Depositor and Consumer Protection. "The FDIC is committed to providing
technical assistance to help community banks comply with recent
The two additional videos in this series
will be released in the coming months and will focus on rules concerning
mortgage servicing and loan originator compensation.
Inspector General to Review Fed Oversight Process
On Thursday, November 20, 2014, the Federal Reserve Board announced reviews of their oversight process for larger financial institutions in response to a November 17, 2014 request
from the Board. The Inspector General will investigate whether there
are adequate methods for decision-makers at the relevant Reserve Banks
and at the Board to obtain all necessary information to make supervisory
assessments and determinations. The Inspector General was also asked to
investigate whether channels exist for decision-makers to be aware of
divergent views among an examination team regarding material issues.
OCC Issues MSB Risk Management Statement; Regulatory Changes
On Wednesday, November 19, 2014, the OCC issued
a "Statement on Risk Management Associated With Money Services
Businesses." The release aimed to provide clarification to national
banks, federal savings associations, and federal branches and agencies
of foreign banks on the agency's supervisory expectations with regard to
offering banking services to money service organizations.
The OCC also issued "Federal Branches and Agencies," a revised booklet
of the Comptroller's Licensing Manual, previously released in December
of 1999. The updated booklet incorporates applicable regulatory changes,
adds discussion of new activities and operations permitted for federal
branches and agencies, and includes policy considerations for
conversions of state-licensed branches and agencies to federal licenses,
among other changes.
Bank, Debt Relief Company Challenge Dodd-Frank Act
November 19, 2014, Big Spring, a Texas-based bank, and California debt
relief company Morgan Drexen, argued they should be allowed to submit a
Constitutional challenge of the Dodd-Frank Act in front of a federal
appeals court. In 2012, Big Spring challenged the constitutionality of
the CFPB, the Financial Stability Oversight Council (FSOC), and the
Government's ability to wind down large financial firms, but the case
was dismissed for lack of standing. In 2013, Drexen's case was dismissed
by the Federal Court in Washington state because the Court indicated
the challenge should have been brought before a California court.
Drexen's attorney indicated the court should consider the structure of
the CFPB and advocated for a bipartisan commission instead of a sole
GAO Report Calls for Improved SIFI Designation Process
On Thursday, November 20, 2014, the Government Accountability Office (GAO) released a report
with recommendations to improve the Financial Stability Oversight
Council's (FSOC) process for designating Systemically Important
Financial Institutions (SIFIs). Because of the substantial impact these
decisions may have on a financial institution, and the entire financial
system, the report evaluated how FSOC has managed the SIFI designation
process thus far. GAO found three areas where FSOC could enhance
accountability and transparency:
Highlights from the report are available here.
- Tracking and monitoring:
GAO recommends strong internal control standards for clearer
documentation of resources used during the process in order to improve
the quality and performance of FSOC.
- Disclosure and transparency: GAO recommends improved transparency, including always fully disclosing the rationales for its decisions.
- Scope of evaluation and procedures:
FSOC has evaluated companies using only of two statutory determination
standards (a company's financial distress, not activities), which may
prevent FSOC from making comprehensive determinations of which
institutes may pose a threat to the financial system.
November 21, 2014
November 14, 2014
November 7, 2014
October 31, 2014
October 24, 2014
October 17, 2014
October 10, 2014
October 3, 2014
September 26, 2014
September 19, 2014
September 12, 2014
September 5, 2014
August 29, 2014
August 22, 2014
August 15, 2014
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August 1, 2014
July 18, 2014
July 11, 2014
June 27, 2014
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April 25, 2014
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February 28, 2014
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January 31, 2014
January 24, 2014
January 17, 2014
January 10, 2014