CFPB Archives - The Industry Spread

House Fin Democrats Target Trump Agenda

April 11, 2019 by Michael Volpe Leave a Comment Filed Under: Feature Articles Tagged: Alexandria Ocasio-Cortez, AOC, CFPB, Deutsche Bank, Donald J. Trump, Elizabeth Warren, forced Arbitrage, House Financial Services Committee, ICE, The House Financial Services Committee

House of Democrats appear like they are using the House Financial Services Committee to fight proxy wars with President Donald Trump. That may not be such a bad thing for traders.

Steve Mnuchin, the US Treasury Secretary, was on Capitol Hill testifying in front of the House Financial Services Committee for his annual report on the state of international financial system on April 9.

Maxine Waters, the California Democrat who chairs the committee, used much of her opening remarks to harangue against Trump’s Russia policy.

“The Secretary also must provide this committee with complete answers today regarding the treasury department’s actions to delist companies associated with Russian oligarch Oleg Deripaska. Deripaska is a criminal and Vladimir Putin’s confidante, who should not be let off the from sanctions that were put in place to punish bad actors. I’m very concerned that the delisting agreement that treasury implemented sends exactly the wrong message to Deripaska, other Russian oligarchs and Putin himself.” Waters said later, “Trump has shown a deference to and fondness of Vladimir Putin, including at the Helsinki Summit.”

While Mnuchin testifying presents an especially rich environment for such a proxy war, it continues a trend since the election.

Waters has made it clear for months that at least one goal was to use her power to begin as many investigations of Trump’s businesses as she could.

A story in Fortune shortly after the election noted, “As head of the financial services committee, which oversees the American banking system and its regulators, Waters would have the power to subpoena Trump’s personal tax returns and bring in bank executives for investigations.

“Trump has bucked presidential tradition in not releasing his personal tax returns, claiming that he has to wait for an IRS audit on his returns to be completed first. Yet that still hasn’t happened.”

A February 2019 story from American Banker talks about Waters burgeoning investigation of Trump’s ties to Deutsche Bank.

“The House Financial Services Committee, chaired by California Democrat Maxine Waters, is reportedly planning to investigate allegations that Deutsche Bank helped launder money on behalf of Russian customers, in addition to looking into the bank’s business dealings with the president and his family. Trump is said to have borrowed hundreds of millions of dollars from the German lender.” The story noted.

Alexandria Ocasio-Cortez

Alexandria Ocasio-Cortez (AOC) is also a member of the committee and according to a tweet her priorities were. “Personally, I’m looking forward to digging into the student loan crisis, examining for-profit prisons/ICE detention, and exploring the development of public & postal banking. To start.” AOC is a socialist but also a rising star in the Democratic party. She asked questions during a recent hearing on holding executives accountable. The substance of her questions was regarded arbitration agreements but mentioned climate change, her pet issue, more than once as well. “If we do nothing about forced arbitration and allow this practice to continue, could this mean that information about how companies are deceiving the public about issues like climate change or any other could remain hidden from the public?” she asked at the hearing.

With the election still a year and a half away- November 2020 is the next US Presidential election- the rhetoric will sharpen as the stakes get higher. This may all be good news for traders.

The same Fortune article also noted, “Waters opposes the Trump administration’s deregulation of banks and financial institutions, and wants more power for the Consumer Financial Protection Bureau. While it’s unlikely her regulation proposals for the banking industry would make it through a Republican-controlled Senate, it’s also unlikely any further deregulation would make it past her committee.”

Waters can use the committee to hold hearings where her colleagues can lambast Trump’s economic policy; she can start all sorts of new investigations.

She’s also likely to use the committee to try and protect the Consumer Financial Protection Bureau (CFPB), a brainchild of Elizabeth Warren.

The CFPB provides protection for consumers in the financial sector, by investigating and putting rules in place for credit cards, loans, debt collectors, and others.

It has a very limited role in securities, which already has a regulator. It was created as part of Dodd/Frank, championed by Democrats and loathed by Republicans.

If Waters is using her time to fight these battles, it will leave little time for any sort of sweeping reform of securities; that theoretical reform, as Fortune noted, has little hope of passing the Senate anyway.

Consumer Financial Protection Bureau Issues Advance Notice of Proposed Rulemaking on Property Assessed Clean Energy Financing

March 11, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Clean Energy Financing, Consumer Financial Protection Bureau, consumer protection act, Economic Growth, PACE financing, Regulatory Relief

Today the Consumer Financial Protection Bureau (CFPB) issued an Advance Notice of Proposed Rulemaking (ANPR) on residential Property Assessed Clean Energy financing.

“Today’s action is the next step in the Bureau’s efforts to implement the Economic Growth, Regulatory Relief and Consumer Protection Act as expeditiously as possible,” said CFPB Director Kathleen L. Kraninger. “I look forward to reviewing the comments in response to the questions we are asking to facilitate the required rulemaking.”

The Economic Growth, Regulatory Relief, and Consumer Protection Act, signed into law in May 2018, directed the Bureau to prescribe certain regulations for PACE financing.

The Bureau will consider the information it receives in response to today’s ANPR to develop a Notice of Proposed Rulemaking. The information solicited will enable the Bureau to better understand the market and unique nature of PACE financing. This will help the Bureau formulate proposed regulations that not only would achieve statutory objectives but also would reflect a careful consideration of costs and benefits.

The public will have 60 days to comment after publication of the ANPR in the Federal Register.

The ANPR is available at: https://files.consumerfinance.gov/f/documents/cfpb_anpr_residential-property-assessed-clean-energy-financing.pdf

###

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

GAO Wants CFPB Involved in Fintech Banking Alternatives

January 25, 2019 by Michael Volpe Leave a Comment Filed Under: Feature Articles Tagged: banking, CFPB, Fintech, GAO

The Government Accountability Office (GAO) recommends more involvement from the Consumer Financial Protection Bureau (CFPB) in guiding fintech companies involved in banking activities.

In a new blog post from the GAO, the watch dog looked at the burgeoning fintech alternative banking industry.

“Financial technology—or “fintech”—can help connect lenders and borrowers online. Some fintech lenders told us that they use alternative data to help determine borrowers’ creditworthiness. For example, lenders may supplement traditional data (such as credit scores) with information about a borrower’s college degree.” The GAO stated in the blog post.

The GAO further noted, “We recommended that CFPB, in coordination with the federal banking regulators, communicate in writing to fintech lenders about how to use alternative data.” The GAO is the Congressional arm which provides auditing, evaluation, and investigative services for Congress.

According to a fact sheet from Reuters,The CFPB was created as part of Dodd/Frank, largely the brain child of Massachusetts Senator Elizabeth Warren, and the CFPB “write and enforce rules for banks and other firms, aiming to protect consumers from deceptive and abusive loans and other financial products and services.”

According to the GAO blog, Alternative data “is generally defined as information not traditionally used by the national consumer reporting agencies in calculating a credit score. Some alternative data (such as on-time rent payments) are financial and similar to traditional data, while others are non financial (such as a borrower’s educational institution and degree). Some fintech lenders use alternative data to supplement traditional data used to make credit decisions or to detect potential fraud.”

Alternative data allows borrowers with little or no traditional credit history to get credit and also helps make the credit decision process more streamlined and therefore faster.

While alternative data provides a great deal of potential, the GAO listed several potential pitfalls.

Some types of alternative data, such as online social network information about living in disadvantaged areas, may be associated with characteristics protected by fair lending laws (e.g., laws that prohibit discrimination on the basis of race or national origin). Consequently, using alternative data in credit decisions raises concerns that borrowers who are part of these protected classes may be adversely affected.
Concerns also exist that there may be a lack of transparency about what alternative data is being used and how it is employed in the credit decision. The borrower may also be unable to dispute the information used.
Recent cyber security breaches show there is a potential for security risks. This may become a growing concern as lenders expand beyond using traditional borrower data.

The blog post followed a December 2018 report by the GAO on fintech. You can find that report here.

Bureau of Consumer Financial Protection Advisory Committees Meet With New Members

October 1, 2018 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Advisory Committees, bank advisory, CFPB, Consumer Financial Protection, credit union

WASHINGTON, D.C. — The Bureau of Consumer Financial Protection (Bureau) today began Advisory Committees meetings in Washington, D.C. with members of its revamped Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council. This is the first joint gathering of these three panels of experts, who advise Bureau leadership on a broad range of consumer financial issues and emerging market trends.

“This marks the first meeting of the experts from outside government that make up the Bureau’s new-look advisory committees, who are providing a wide array of new perspectives to consumer protection,” said Bureau Acting Director Mick Mulvaney. “We look forward to hearing high-quality feedback from these experts in consumer finance markets to inform the Bureau’s decision-making going forward.”

The Consumer Advisory Board is mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act to advise and consult with the Bureau’s Director on a variety of consumer financial issues. The Bureau also created a Community Bank Advisory Council and a Credit Union Advisory Council. The Community Bank Advisory Council and Credit Union Advisory Council advise and consult with the Bureau on consumer financial issues related to community banks and credit unions. In March 2018, the Bureau issued a notice in the Federal Register outlining the responsibilities of the advisory committees, as well as the duties of their members, and solicited applications for appointment.

The newly appointed members include experts in consumer protection, financial services, FinTech, community development, fair lending, civil rights, and consumer financial products and services as well as representatives of community banks and credit unions. They are charged with identifying and assessing the impact of emerging products, practices, or services on consumers and other market participants. Advisory committee members share expertise across the range of issues under the Bureau’s jurisdiction. New members to the Consumer Advisory Board, Community Bank Advisory Council and Credit Union Advisory Council will serve a one-year term.

Consumer Advisory Board Members

Liz Coyle, Executive Director, Georgia Watch
Sameh Elamawy, Chief Executive Officer, Scratch Services, Inc.
Manning Field, Chief Operating Officer, Acorns
Jason B. Gross, Chief Executive Officer, Petal
Clinton B. Gwin, President and CEO, Pathway Lending
Ronald A. Johnson, President, Clark Atlanta University
Brent Neiser, Senior Director of Strategic Programs and Alliances, National Endowment for Financial Education
Sophie Raseman, Director of Product, Brightside
Luz Urrutia, Chief Executive Officer, Opportunity Fund

Community Bank Advisory Council Members

John Erik Beguin, Founder, CEO, and President, Austin Capital Bank
Bryan Bruns, President & CEO, Lake Central Bank
Maureen Busch, Vice President, Compliance and CRA Officer, The Bank of Tampa
Michael H. Head, President/CEO/Director, First Federal Savings Bank
Aubery L. Hulings, Vice President, Operations Manager, The Farmers National Bank of Emlenton
Heidi Sexton, EVP/Chief Operating Officer, Sound Community Bank
Jeanni Stahl, SVP/Chief Risk and Compliance Officer, MetaBank

Credit Union Advisory Council Members

Arlene Babwah, Vice President Risk Management, Coastal Federal Credit Union
Sean Cahill, President & CEO, Southwest 66 Credit Union
Teresa Campbell, President & CEO, San Diego County Credit Union
Christopher Court, Vice President, Accounting & Operations, Service 1st Federal Credit Union
James Hunsanger, Chief Risk Officer, Michigan State University Federal Credit Union
Bryan Price, President & CEO, Indiana University Credit Union
Eric Schmidt, President & CEO, WestStar Credit Union

More information on the Bureau’s advisory committees can be found here: https://www.consumerfinance.gov/advisory-groups/

Bureau of Consumer Financial Protection Issues Report and RFI on the Bureau’s Sources and Uses of Data

September 29, 2018 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, commercial vendors, consumers, data governance, federal register, financial institutions, Report and RFI, RFI, Uses of Data

WASHINGTON, D.C. — The Bureau of Consumer Financial Protection (Bureau) today issued a report and Request for Information (RFI) regarding the Bureau’s sources of data and how data is used. The report provides transparency into how the Bureau collects and uses data and the accompanying RFI gives the public an opportunity to comment on those practices.

To carry out its statutory functions and obligations, the Bureau obtains data to inform its decisions. To date, the Bureau has undertaken more than 188 data collections from public sources, government agencies, commercial vendors, financial institutions, and consumers.

This report addresses questions concerning the sources of the Bureau’s data and its use. It describes what data the Bureau collects, where it comes from, and how it is accessed and reused within the Bureau. In addition, it publishes the full text of the Bureau’s internal data governance policies and charters. The accompanying RFI will give the public an opportunity to submit feedback on the Bureau’s data governance program and data use and suggest ways to improve outcomes for both consumers and covered entities.

The RFI on the Bureau’s Sources and Uses of Data is available at: https://www.consumerfinance.gov/policy-compliance/notice-opportunities-comment/open-notices/request-information-regarding-bureau-data-collections/

The Bureau will begin accepting comments once the RFI is printed in the Federal Register, which is expected within 3 to 5 business days. The RFI will be open for comment for 90 days.

The report to accompany this RFI is available at: https://www.consumerfinance.gov/data-research/research-reports/sources-and-uses-data-bureau-consumer-financial-protection/

Bureau Of Consumer Financial Protection To Open Southeast Regional Office In Atlanta

September 23, 2018 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Consumer Financial Protection, Federal Deposit Insurance Corporation, Financial Protection, regulatory partners, washington d.c

WASHINGTON, D.C. — The Bureau of Consumer Financial Protection (Bureau) today announced it will be relocating its southeast regional office from Washington, D.C. to Atlanta, Georgia.

The Bureau already has regional offices in New York, Chicago, and San Francisco that are used mostly by supervision staff but also house enforcement attorneys and other Bureau personnel. Since the Bureau’s inception, the southeast regional team has been based temporarily out of the Bureau’s D.C. headquarters.

The move will align the Bureau with its regulatory partners that already have a regional presence in Atlanta, including the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.

The city selection process led to Atlanta as the city that best enables the Bureau to fulfill its statutory mission and enhance its collaboration with its regulatory partners, while being as efficient as possible. This process took into account factors including the average rental cost in the region, proximity to institutions examined by the Bureau, and ease of travel for examiners.

Details are still being finalized but the move is anticipated to take place in late 2019.

Bureau of Consumer Financial Protection Issues Rule to Implement and Clarify New HMDA Amendments

September 4, 2018 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Consumer Financial Protection, HMDA, HMDA Amendments, Home Mortgage Disclosure Act

WASHINGTON, D.C. — Today the Bureau of Consumer Financial Protection (Bureau) issued an interpretive and procedural rule to implement and clarify the requirements of section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), which amended the Home Mortgage Disclosure Act (HMDA). The Bureau also released updates to the Filing Instructions Guide (FIG) for HMDA data collected in 2018 to incorporate the Act as implemented and clarified by the rule issued today.

On May 24, 2018, the President signed the Act, which contains provisions that are intended to decrease the burden smaller depository institutions face in complying with HMDA and its implementing regulation, Regulation C. Some such institutions have raised questions about the application of the Act, and the rule issued today seeks to provide clarification. Specifically, the rule clarifies that insured depository institutions and insured credit unions covered by a partial exemption have the option of reporting exempt data fields as long as they report all data fields within any exempt data point for which they report data; clarifies that only loans and lines of credit that are otherwise HMDA reportable count toward the thresholds for the partial exemptions; clarifies which of the data points in Regulation C are covered by the partial exemptions; assigns a non-universal loan identifier for partially exempt transactions for institutions that choose not to report a universal loan identifier; and clarifies the exception to the partial exemptions for negative Community Reinvestment Act examination history.

At a later date, the Bureau anticipates that it will initiate a notice-and-comment rulemaking to incorporate these interpretations and procedures into Regulation C and further implement the Act.

The interpretive and procedural rule issued today is available at: https://files.consumerfinance.gov/f/documents/bcfp_hmda_interpretive-procedural-rule_2018-08.pdf

The updated Filing Instructions Guide (FIG) is available at: https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2018-hmda-fig-2018-hmda-rule.pdf

Bureau of Consumer Financial Protection Announces Director for the Office of Innovation

July 20, 2018 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: Bureau, CFPB, Consumer Fraud, Financial Protection, Fintech, FinTech Regulatory, Office of Innovation, paul watkins

WASHINGTON, D.C. – Bureau of Consumer Financial Protection (Bureau) Acting Director Mick Mulvaney today announced he has selected Paul Watkins to lead the Bureau’s new Office of Innovation.

“I am delighted that Paul Watkins is bringing his deep expertise, track record of protecting consumers, and commitment to innovation to the Bureau,” said Acting Director Mulvaney. “I am confident that, under his leadership, the Office of Innovation will make significant progress in creating an environment where companies can advance new products and services without being unduly restricted by red tape that belongs in the 20^th century.”

Acting Director Mulvaney recently created the Office of Innovation to focus on encouraging consumer-friendly innovation, which is now a key priority for the Bureau. The work that was being done under Project Catalyst will be transitioned to this new office. The Bureau intends to fulfill its statutory mandate to promote competition, innovation, and consumer access within financial services. To achieve this goal, the new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.

Watkins comes to the Bureau from the Arizona Office of the Attorney General, where he was in charge of the office’s fintech initiatives. He managed the FinTech Regulatory Sandbox, the first state fintech sandbox in the country, which allows a company limited access to the marketplace in exchange for relaxing some regulations. Watkins was also the Chief Counsel for the Civil Litigation Division. In that role, he managed the state’s litigation in areas such as consumer fraud, antitrust, and civil rights. Previously, Watkins practiced at Covington & Burling LLP in San Francisco and Simpson, Thacher & Bartlett LLP in Palo Alto, Calif. He is a graduate of Hillsdale College and Harvard Law School, and a former clerk for Judge Dennis W. Shedd on the United States Court of Appeals for the Fourth Circuit.