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The payday loan industry is abuzz with the news that the CFPB has commenced its initial payday lender exam, operating in tandem with state examiners and providing virtually no advance warning. This news comes on top of a report that the CFPB has begun to examine non-bank mortgage companies. It should serve as yet another warning to payday lenders, student lenders, mortgage lenders and companies that might soon become “larger participants” in a market for consumer financial services that they urgently need to get their act in gear and ensure that their federal-law compliance is up-to-speed.… Continue Reading

In a recent blog on the Bacchus-Capito letter to CFPB Director Richard Cordray, possible “legislative fixes” to the highly publicized privilege waiver issues involving the Bureau and possible amendments to 12 U.S.C. §§ 1821(t) and 1828(x) were discussed.  The major shortcoming identified with regard to such amendments was the persistent problem of the Bureau’s sharing privileged information, whether obtained from a regulated entity or from another federal regulatory agency, with State Attorneys General or other law enforcement authorities.… Continue Reading

Section 1025 of Dodd-Frank gives the CFPB exclusive authority to examine insured banks, savings associations, and credit unions with total assets of more than $10 billion and their affiliates (“Large Institutions”) for compliance with federal consumer financial laws and primary authority to enforce those laws. For smaller institutions ($10 billion or less) and their affiliates, Section 1026 keeps examination and enforcement authority with the prudential regulators—the OCC, the Fed, the FDIC, and the NCUA.… Continue Reading

The CFPB’s announcement that it will institute an “Early Warning Notice” process has generally been welcomed in the financial community as an opportunity for pre-litigation communications with the Office of Enforcement. The process, described in CFPB Bulletin 2011-08 [Enforcement] which includes a sample advance notice letter, appears to virtually mirror the SEC’s well-established Wells notice.… Continue Reading

Two notices with requests for comments recently published by the CFPB present prime opportunities for banks and other regulated institutions to engage with the CFPB not only to positively impact the CFPB’s processes and procedures, but also to demonstrate that banks seek to develop a relationship of cooperation and collaboration with the CFPB.… Continue Reading

The CFPB’s Mortgage Servicing Examination Procedures, which I wrote about recently, cover lots of interesting topics.  Today, I want to focus on the section of the procedures that deals with a servicer’s consumer complaint handling process. 

The CFPB intends to assess the quality of servicers’ systems for receiving and dealing with complaints, including aspects of customer service phone lines like the ease of getting to a live person, the average hold times, and the abandonment rate of phone calls. … Continue Reading