CFPB Sharing Consumer Complaint Data with State Agencies

December 11, 2012 the CFPB announced plans to share data from those complaints with state regulatory agencies.  They currently have a database to collect complaints on credit cards, mortgages, student loans, checking accounts, savings accounts, credit reporting, bank services, and other consumer loans.

When a consumer files a complaint, we screen it to make sure that it’s complete and not a duplicate of another complaint we’re already working on for that consumer. Next, we send it to the company in question and ask them to reply to the complaint within 15 days and expect them to close all but the most complicated complaints within 60 days. After the company responds, we publish a selection of the data (with information identifying the consumer removed) in our public Complaint Database.

According to the CFPB website their “goal in sharing consumer complaints with state agencies is to enhance efficient, transparent, and effective government to better protect American consumers”

Initially consumer complaints will be shared via a secure channel that protects the confidentiality of personally identifiable information. In the future, they are planning on building ways to accept complaints and information from the agencies as well, and to make the data available to other federal agencies, state attorneys general, local agencies, congressional offices as appropriate, and other governmental organizations like the California Monitor (a program of the California Attorney General) and the Office of Mortgage Settlement Oversight.


CFPB Lays Out Implementation Plan for New Mortgage Rules

On February 13, 2013, the Consumer Finance Protection Bureau published their intent to assist in implementation for all the new mortgage rules that have been published.

They stated that they will:

  • Coordinate with other agencies: The CFPB is coordinating with other federal government regulators that also conduct examinations of mortgage companies to ensure all regulators have a shared understanding of the CFPB’s new rules. This will help promote a consistent regulatory experience for industry.
  •  Publish plain-language guides: The CFPB will publish easy-to-understand summaries of the regulations in both written and video form. The guides, available in the spring, will be particularly helpful to smaller businesses with limited staff for compliance.
  •  Publish updates to the official interpretations: Over the next year, the CFPB plans to issue updates of the “official interpretations,” which provide guidance on how to comply with the rules. These updates will allow the CFPB to address important questions raised by industry, consumer groups, or other agencies. Priority for these updates will be given to issues that are important to a large number of providers or consumers, and that critically affect mortgage companies’ implementation decisions. The Bureau expects to issue the first one in the spring and issue additional updates, as needed.
  •  Publish readiness guides: These guides, available this summer, will help mortgage originators and servicers prepare to comply with the new rules by giving them helpful check-lists, such as suggesting that implementation plans include items like revising policies and procedures and finalizing training plans for staff. More in-depth examination procedures are expected to be published later this year by the Federal Financial Institutions Examination Council. Industry members will be able to use these examination procedures to conduct self-assessments and internal reviews of their readiness and compliance.
  •  Educate consumers: As the January 2014 date approaches, the CFPB will give consumers information about their new protections under these rules through a broad-reaching consumer education campaign.

More information about the CFPB’s new mortgage rules can be found at:

Any inquiries about the meaning or intent of the regulations may be directed to: or 202-435-7700.

ECOA Rule on Providing Appraisals Final Rule Released by CFPB

The Consumer Financial Protection Bureau (Bureau) is issued the final rule implementing an amendment to the Equal Credit Opportunity Act (ECOA) regarding furnishing copies of appraisals and other written valuations to applicants for first lien loans secured by a dwelling on January 18, 2013. The rule will become effective on January 18, 2014.

The rule amends the appraisals provision of Regulation B, which implements ECOA. The amended provision covers only applications for credit to be secured by a first lien on a dwelling.

The new rule:

  • Requires creditors to notify applicants within three business days of receiving an application of their right to receive a copy of appraisals developed.
  •  Requires creditors to provide applicants a copy of each appraisal and other written valuation promptly upon their completion or three business days before consummation (for closed-end credit) or account opening (for open-end credit), whichever is earlier.
  • Permits applicants to waive the timing requirement for providing these copies. However, applicants who waive the timing requirement must be given a copy of all appraisals and other written valuations at or prior to consummation or account opening, or if the transaction is not consummated or the account is not opened, no later than 30 days after the creditor determines the transaction will not be consummated or the account will not be opened.
  • Prohibits creditors from charging for the copy of appraisals and other written valuations, but permits creditors to charge applicants reasonable fees for the cost of the appraisals or other written valuation unless applicable law provides otherwise.

The disclosure requirements of this rule overlap with a rule on appraisals for higher-priced mortgage loans the Bureau is issuing jointly with several other agencies today. That rule implements an amendment that the Dodd-Frank Act made to TILA, which also requires creditors to provide free copies of appraisals in transactions covered by the rule and to provide a disclosure at application. The same appraisal notice can be used to satisfy both this rule and the TILA rule, in transactions where both rules apply.

Never on a Sunday…..CFPB will release the LO Comp Final Rule

The CFPB has announced they will release the LO Comp Final Rule on Sunday, July 20th.

The final rule revises Regulation Z to implement amendments to the Truth in Lending Act (TILA).

The Proposed Rule had provisions to prohibit compensation based on the term of a transaction or proxy for a term; dual compensation; a required zero point loan and loan originator qualifications.

We will have to wait until tomorrow apparently Never on a Sunday is not for the Mortgage Industry.


Qualified Mortgage to Be ‘Unveiled’ January 9, 2013

Qualified Mortgage Timeline:

We are about to enter a new era in consumer lending, the era of the qualified mortgage. But how did we reach this point? Here’s a quick look back:

July 21, 2010 — The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. Among other things, the Dodd-Frank Act is designed to “promote the financial stability of the United States by improving accountability and transparency in the financial system [and] protect consumers from abusive financial services practices.”

July 21, 2011 — The Consumer Financial Protection Bureau (CFPB) begins operation. The CFPB’s creation was mandated by the Dodd-Frank Act. One of the bureau’s first tasks is to develop the final definition of a qualified mortgage, or QM.

May 31, 2012 — CFPB opens a public comment period to receive input on the new regulations.

July 9, 2012 — The comment period is closed.

July 11, 2012  – The House Subcommittee on Financial Institutions and Consumer Credit held a hearing addressing consumer and market perspectives of mortgage reforms made by The Dodd-Frank Wall Street Reform and Consumer Protection Act. Both consumer and industry members provided testimony, including the Mortgage Bankers Association and American Bankers Association.  The ongoing CFPB rulemaking to implement the Dodd-Frank ability to repay rule and special status under the rule for qualified mortgages was the focus of both trade groups’ testimony

July – Dec 2012 — CFPB considers comments provided by consumers, industry groups, U.S. senators and others. Toward the end of the year, they say they are on schedule to finalize the QM rules by their January 21, 2013 deadline.

November 11, 2012 — The publishers of the Home Buying Institute launch a not-for-profit website, to serve as a central source of information on QM-related subjects.

December 28, 2012 — Inside Mortgage Finance reports that “the agency’s Qualified Mortgage rule will be unveiled the evening of January 9″ 2013.

Lenders are concerned and have been discussing the proposal and what might happen.  The rule will change the way many of them do business and will affect all areas of the mortgage market.

We are at a wait and see moment.

CFPB Issues Final Rule on Effective Date of New Regs

On December 28, 2012 a final rule was published clarifying when a CFPB rule becomes effective, it will be the earlier of:

  • when the final rule is posted on the Bureau’s Web site, or
  • when the final rule is published in the Federal Register

he Bureau’s Web site is 

Clarifying what constitutes issuance of a rule is beneficial because in some cases the date of issuance of a rule has legal consequences.  For example, under section 1400(c)(3) of the Dodd-Frank Act, certain provisions of title XIV will go into effect on the date that is 18 months after the designated transfer date,unless relevant regulations are “issued” by that date. Given the Bureau’s practice of posting rules on its Web site before the Office of the Federal Register makes the rules available for public inspection or publishes the rules in the Federal Register, uncertainty could arise regarding the date on which such rules were issued. The Final Rule eliminates uncertainty by clarifying when the Bureau’s rules are deemed issued.

The Bureau generally intends to issue rules by posting them on its Web site, but, as a precaution, the Final Rule provides that a rule will be considered issued upon publication in the Federal Register if by inadvertence or for some other reason the rule is not posted on the Web site or is published in the Federal Register before it is posted on the Web site.

CFPB Issues Second Annual Report to Congress

The CFPB has issued its second annual report to Congress on the CFPB’s workforce. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires the Consumer Financial Protection Bureau (CFPB) to submit this report annually to Congress with its:


    • Recruitment and Retention Plan
    • Training and Workforce Development Plan
    • Workforce Flexibilities Plan

The plans presented in this report represent the CFPB’s current goals for recruitment and retention, training and workforce development, and workforce flexibilities.

Over the past year, the CFPB continued to build its workforce by identifying and recruiting the best qualified people to meet immediate and long-term staffing needs.
As of November 3, 2012, the Bureau had 1,014 employees. The Bureau’s growth since FY2011 is indicated in below:

CFPB Fair Lending Report Released

The CFPB Fair Lending Report, December 2012, discussed the first year accomplishments and issues in Fair Lending.

The Dodd-Frank Act vests the CFPB with specified supervisory, enforcement, and rulemaking authority with respect to a number of federal consumer financial laws, including ECOA and HMDA.  ECOA has broad coverage, prohibiting discrimination in mortgage lending and a wide array of other types of lending, including auto finance, credit cards, business loans, and unsecured loans. HMDA requires that specified mortgage lenders annually collect and report mortgage lending data in order to determine whether institutions are serving the housing needs of their communities, to aid in targeting public investment, and to identify possible discriminatory lending patterns and enforce fair lending laws.

Additional Requirements included:

Establishment of the Office of Fair Lending and Equal Opportunity. Congress
required the creation of the Office of Fair Lending and Equal Opportunity within the


  • ECOA – to “facilitate enforcement of fair lending laws and enable communities,governmental entities, and creditors to identify business and community development needs and opportunities of women-owned, minority-owned, and small businesses” (Dodd-Frank Act § 1071);
  • HMDA – to require mortgage lenders to collect and report additional data fields(Dodd-Frank Act § 1094); and
  • The Truth in Lending Act (TILA) (15 U.S.C. § 1602) – to “prohibit . . . abusive or unfair lending practices that promote disparities among consumers of equal credit worthiness but of different race, ethnicity, gender, or age” (Dodd-Frank Act§ 1403).

Reports to Congress.

Most frequently cited Regulation B violations by FFIEC Agencies

2012 CFPB Fair Lending Report

CFPB and DOJ Coordinate on Fair Lending

On December 6, the Consumer Financial Protection Bureau (CFPB or Bureau) and the U.S. Department of Justice (DOJ) announced a Memorandum of Understanding (MOU) to coordinate enforcement of the federal fair lending laws, including the Equal Credit Opportunity Act (ECOA). Simultaneously, the CFPB issued its first annual Fair Lending Report to Congress as required by the Dodd-Frank Act, which describes the Bureau’s efforts to build its Office of Fair Lending and Equal Opportunity and reviews its fair lending accomplishments. Together, these initiatives demonstrate that the CFPB and DOJ are continuing to work together closely to aggressively enforce the federal fair lending laws.

Memorandum of Understanding Regarding Fair Lending Coordination

The new MOU supplements an existing Information Sharing Agreement Regarding Fair Lending Investigations among the DOJ, the U.S. Department of Housing and Urban Development, and the Federal Trade Commission, which allows these fair lending enforcement agencies to share confidential information related to fair lending investigations, screening procedures, and investigative techniques. It also follows a general cooperation MOU that the DOJ and CFPB entered into earlier this year.

The new MOU focuses on information sharing and referral of matters alleging ECOA violations, but also governs the agencies’ referral processes for other fair lending-related laws and joint fair lending investigations.

Referral of ECOA Violations to DOJ: The MOU explains the circumstances under which the CFPB will refer potential ECOA violations to the DOJ for further investigation or prosecution. Consistent with the established practice of the prudential federal bank regulators, the MOU requires the CFPB to refer to the DOJ all matters where it has “reason to believe” that one or more creditors has engaged in a pattern or practice of lending discrimination. The CFPB may also refer to DOJ any violation of Section 701(a) of ECOA, including a recommendation that a civil action be commenced if the CFPB cannot obtain compliance from the financial institution.

Following referral, the DOJ has 60 days to determine whether to proceed with its own investigation. Within that period, the CFPB may not unilaterally commence its own action with regard to the referred violation(s). Even if exigent circumstances arise during the 60-day review period, the CFPB must first consult with the DOJ before taking independent action.

The CFPB may also refer to the DOJ possible violations of fair lending-related laws for which the CFPB has no statutory examination or enforcement authority, but for which the DOJ possesses enforcement authority, including the Fair Housing Act and the Servicemembers Civil Relief Act. Despite its lack of statutory authority to enforce these laws, the CFPB’s Supervision & Examination Manual provides resources to identify such potential violations for purposes of referrals to another federal agency.

Joint Investigations: With regard to joint investigations, the MOU provides only that “[w]hen appropriate, the DOJ and the CFPB will seek to collaborate on investigations, and conduct joint investigations of entities allowing the Agencies to leverage resources and expertise.” The agreement calls for quarterly meetings to discuss investigative activity, but allows each agency to retain “independent authority to proceed in the manner that it determines is appropriate.”

Information Sharing: The MOU describes how the parties have agreed to designate, share, use, and protect as non-public, certain information related to investigations of potential ECOA violations, including confidential supervisory information collected by the CFPB under its supervision and examination authority. The MOU allows for additional case- or investigation-specific information sharing agreements as appropriate, based on a form agreement provided as an attachment to the MOU. Section 7 of the form agreement indicates that “sharing of any confidential information [between the CFPB and DOJ] under this Agreement does not constitute a waiver of, or otherwise affect, any privilege any agency or person may claim with respect to such information under federal law.”

The Consumer Financial Protection Bureau’s Ombudsman Releases it’s First Report

On November 30, 2012 the CFPB released the first annual report on the Ombudsman’s office.

The Bureau’s Ombudsman office was established as part of the Dodd-Frank Act in December 2011. The office, headed by Wendy Kamenshine, advocates for a fair process  between consumers, the providers of consumer financial products and services, and the CFPB. In addition, the Ombudsman tracks issues raised in inquiries to highlight trends and make recommendations to the CFPB.

In the nearly 10 months since the CFPB Ombudsman Office opened, it received 775 inquiries. Over 80 percent of those inquiries were consumer questions or issues regarding the processes, services, products, or entities under the CFPB’s jurisdiction.

For the next fiscal year, the CFPB Ombudsman will continue addressing individual and systemic inquiries that we receive from consumers and providers of consumer financial products and services.

2013 focus will be  focus on:

  • Inreach – Continuing to share information about the Ombudsman’s role with CFPB staff nationwide, and particularly with new staff who join the Bureau.
  • Outreach – Building on our outreach to make consumers and the providers of consumer financial products and services aware of the Ombudsman resource.
  • Statistics – Sharing additional statistical data with CFPB leadership to highlight the issues received by the Ombudsman and further inform the CFPB on recommendations for change.

2012 Ombudsman Office Annual Report