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Statement by Kathy Kraninger at CFPB/FTC Equifax Settlement Press Conference

July 30, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Equifax Settlement, Kathy Kraninger

Statement by Kathy Kraninger at CFPB/FTC Equifax Settlement Press Conference. Thank you for joining us. Today’s global settlement is the result of a strong partnership between the Bureau, the Federal Trade Commission, and the states. I want to thank my federal and state colleagues for coordinating with us to investigate this important matter. The collaboration and professionalism demonstrated by the staff at the Federal and state level was truly extraordinary and I want to thank the staff for their hard work, including the Bureau staff who worked on this case: Jenelle Dennis, Emily Mintz Sachs, Solange Hilfinger-Pardo, Richa Dasgupta and John Wells.

Credit reporting companies are entrusted with protecting the personal information of millions of consumers. Two years ago, the data breach at Equifax exposed the personal data of approximately 147 million American consumers.

The Equifax data breach compromised names, Social Security numbers, birth dates and addresses, and for some, driver’s license numbers and credit card numbers. In short, the most sensitive personal information of these Americans.

In the days immediately following the announcement, more than 6,000 consumers contacted the Bureau with complaints about the breach and the Equifax response.

The Bureau, along with the FTC and our state partners, launched an investigation into how the Equifax breach happened and how the company responded. After a 20-month investigation, we alleged that Equifax, through unfair and deceptive practices, broke the law both before and after the breach.

This joint investigation led to today’s global settlement, which includes up to $700 million in monetary relief and penalties.

Through the Bureau’s actions, up to $425 million will be available to consumers for the time and money they spent to protect themselves from the very real threat of identity theft, to reimburse them for actual identity theft caused by the breach, and to pay for credit monitoring services for consumers and compensation for their losses.

If you are a consumer who was impacted by the breach, let me provide you with some specifics on how this global settlement will deliver relief.

If after the breach was announced you spent time addressing an identity-theft incident or taking steps to secure your personal information, you may apply to receive compensation for that time. If after the breach announcement, you spent money purchasing credit monitoring or identity-theft protection, placing or lifting security freezes, or have unreimbursed costs associated with identity theft, you may apply to receive reimbursements for the money you spent.

And if you had Equifax credit monitoring or identity protection at any time between September 7, 2016 and September 7, 2017, you may apply to receive back up to 25 percent of the cost you paid to Equifax.

Additionally, consumers affected by the breach will be provided with tools to protect themselves against identity theft for four years, including free three-bureau credit monitoring and $1 million in identity-theft insurance provided through a third party. Those who purchase their own credit monitoring through a different provider can still apply to receive up to $125 to defray the cost. Additionally, starting on December 31, 2019 and extending 7 years, all U.S. consumers may request up to six free copies of their Equifax credit report during any 12-month period. These free copies will be provided to the requesting consumers in addition to any free reports to which they are already entitled under federal law.

We encourage consumers impacted by the breach to visit www.EquifaxBreachSettlement.com for more information about when and how to submit their claims in order to receive free credit monitoring or cash reimbursements. If the court approves the settlement, Consumers will be able to submit a claim either online or by mail. Consumers can also seek information on the CFPB website or from our government partners in the investigation.

Finally, the Bureau fined Equifax $100 million, and will hold Equifax to its requirements under the order to beef up its information-security practices. These are strong measures that send a powerful message about responsibility to those entrusted with private consumer information.

Today’s announcement is not the end of our efforts to make sure consumers’ sensitive personal information is safe and secure. The incident at Equifax underscores the evolving cyber security threats confronting both private and government computer systems and actions they must take to shield personal information.

Too much is at stake for the financial security of the American people to make these protections anything less than a top priority.

Thank you again for being here with us today. I’ll now turn it over to Maryland State Attorney General Brian Frosh.

CFPB, FTC and States Announce Settlement with Equifax Over 2017 Data Breach

July 29, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Equifax, FTC

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau), the Federal Trade Commission (FTC), and 48 states, the District of Columbia and Puerto Rico announced a global settlement today with Equifax that would provide up to $700 million in monetary relief and penalties. In a complaint and proposed stipulated judgment filed in federal district court in the Northern District of Georgia, the Bureau alleges that Equifax engaged in unfair and deceptive practices in connection with the 2017 data breach of Equifax’s systems that impacted approximately 147 million consumers. The proposed settlement with the Bureau, if approved by the court, will provide up to $425 million in monetary relief to consumers, a $100 million civil money penalty, and other relief. The Bureau coordinated its investigation with the FTC and attorneys general from across the country. In total, the settlements with these entities would impose up to $700 million in relief and penalties.

CFPB Director Kathleen L. Kraninger
“Today’s announcement is not the end of our efforts to make sure consumers’ sensitive personal information is safe and secure. The incident at Equifax underscores the evolving cyber security threats confronting both private and government computer systems and actions they must take to shield the personal information of consumers. Too much is at stake for the financial security of the American people to make these protections anything less than a top priority,” said CFPB Director Kathleen L. Kraninger.

“For consumers impacted by the Equifax breach, today’s settlement will make available up to $425 million for time and money they spent to protect themselves from potential threats of identity theft or addressing incidents of identity theft as a result of the breach. We encourage consumers impacted by the breach to submit their claims in order to receive free credit monitoring or cash reimbursements,” concluded Director Kraninger.

In September of 2017, Equifax, a nationwide credit reporting company headquartered in Atlanta, Georgia, announced that a data breach at the company resulted in the exposure of approximately 147 million U.S. consumers’ sensitive personal information, including names, addresses, social security numbers, and dates of birth.

“Companies that profit from personal information have an extra responsibility to protect and secure that data,” said FTC Chairman Joe Simons. “Equifax failed to take basic steps that may have prevented the breach that affected approximately 147 million consumers. This settlement requires that the company take steps to improve its data security going forward, and will ensure that consumers harmed by this breach can receive help protecting themselves from identity theft and fraud.”

The Bureau alleges in its Complaint that Equifax violated the law in several ways through its conduct both before and after the breach. Specifically, the Bureau alleges, Equifax engaged in unfair and deceptive practices in violation of the Consumer Financial Protection Act of 2010 by:

– Failing to provide reasonable security for the massive quantities of sensitive personal information stored within its computer network, causing substantial injury to consumers whose data was stolen;

– Deceiving consumers about the strength of its data security program in its privacy policies; and

– Engaging in acts and practices that caused additional harm or risk of harm to consumers in response to the breach.

To provide relief for consumers affected by the breach, the Bureau’s proposed order requires Equifax to establish a consumer fund (Consumer Fund) with up to $425 million available to provide affected consumers with a broad array of redress. The Consumer Fund would be used to provide reimbursements to affected consumers for time and money they spent related to the breach. If the court approves the settlement, affected consumers may be eligible to receive money by filing one or more claims for the following:

– Up to $20,000 per consumer for lost time and money, including:

$25/hour for up to 20 hours for time spent protecting personal information or addressing identity theft after the breach;
Money spent purchasing credit monitoring or identity theft protection after the breach;
The cost of freezing or unfreezing credit reports at any consumer reporting agency after the breach;
Reimbursement for up to 25 percent of the amount paid to Equifax for credit or identity monitoring subscription products between September 7, 2016 and September 7, 2017;
Any unreimbursed costs, expenses, losses, or charges incurred as a result of identity theft; and
Miscellaneous expenses associated with any of the above, such as notary, fax, postage, mileage and telephone charges.

All affected consumers would be eligible to receive at least 10 years of free credit-monitoring, at least seven years of free identity-restoration services, and, starting on December 31, 2019 and extending seven years, all U.S. consumers may request up to six free copies of their Equifax credit report during any 12-month period. These free copies will be provided to requesting consumers in addition to any free reports to which they are entitled under federal law.

If consumers choose not to enroll in the free credit monitoring product available through the settlement, they may seek up to $125 as a reimbursement for the cost of a credit-monitoring product of their choice.

A settlement administrator will manage the claims process. Consumers must submit a claim in order to receive free credit monitoring or cash reimbursements. After the court approves the settlement, consumers can submit a claim online, or by mail. Consumers may visit this website to learn about the deadlines for filing claims.

In addition to consumer relief, Equifax would be required to pay the Bureau a $100 million civil money penalty. Equifax also would be required to make significant improvements to its data security practices and would be subject to ongoing oversight by regulators.

The Federal Trade Commission also filed a complaint and proposed stipulated judgment in federal court in the Northern District of Georgia today. The attorneys’ general from 48 states, the District of Columbia and Puerto Rico also have reached agreements to resolve investigations of the data breach that are being announced today. The FTC’s and the states’ orders provide for relief for consumers consistent with the Bureau’s order.

A copy of the proposed stipulated order is available at: https://files.consumerfinance.gov/f/documents/cfpb_equifax-inc_proposed-stipulated-order_2019-07.pdf

A copy of the complaint is available here

A fact sheet containing information about the settlement and resources for consumers to learn more is available here

Consumers may go to for more information about when and how to apply for and receive reimbursements.

CFPB To Hold First Symposium On June 25

June 20, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Enforcement, Federal Trade Commission Act, Financial Protection, First Symposium

WASHINGTON, D.C. – The Consumer Financial Protection Bureau announced today that its first symposium will be held on June 25 at 9 a.m. The symposium, part of a series announced earlier this year, will focus on the Dodd-Frank Act’s prohibition on abusive acts or practices. The symposium will be webcast on the Bureau’s website.

The Dodd-Frank Act authorizes the Bureau to take enforcement, supervision, and rulemaking actions concerning unfair, deceptive, or abusive acts and practices (UDAAP). The meaning of abusiveness is less developed than the meaning of unfair or deceptive, which have been defined substantially by the Federal Trade Commission Act. The symposium will provide a public forum for the Bureau and the public to hear various perspectives on the meaning of abusiveness.

This first symposium will have two panels of UDAAP experts. The symposium will also include remarks by CFPB Director Kathleen L. Kraninger and CFPB Deputy Director Brian Johnson. The first panel will include a discussion with leading academic experts in the area of Consumer Protection on various policy issues relating to the abusive standard under Dodd-Frank. The panel will be moderated by Tom Pahl, CFPB’s Policy Associate Director, Research, Markets and Regulation. The experts on the panel will include:

Patricia McCoy, Professor of Law, Boston College Law School
Todd Zywicki, Professor of Law, George Mason University, Antonin Scalia Law School
Howard Beales, George Washington University; former Director of the Federal Trade Commission (FTC) Bureau of Consumer Protection
Adam Levitin, Professor of Law, Georgetown Law School

The second panel will examine how the abusive standard has been used in practice, and will include leading legal experts in the field. The panel will be moderated by David Bleicken, CFPB Deputy Associate Director, Supervision, Enforcement and Fair Lending. Experts on the panel will include:

William MacLeod, Partner at Kelley Drye; former Director of the FTC Bureau of Consumer Protection and Bureau of Competition
Eric Mogilnicki, Partner at Covington & Burling; former Chief of Staff, Senator Ted Kennedy
Lucy Morris, Partner Hudson Cook; former CFPB Deputy Enforcement Director
Nicholas Smyth, Assistant Director of the Pennsylvania Office of Attorney General’s Bureau of Consumer Protection, Senior Deputy Attorney General

Members of the public that plan to attend the symposium should RSVP at this link: https://www.consumerfinance.gov/about-us/events/cfpb-symposium-abusive-acts-or-practices/.

CFPB Highlights of Director Kraninger’s First Six Months

June 19, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: AskCFPB, CFPB, CFPB Highlights, Consumer Financial Protection, financial exploitation, financial products, Financial Protection Act, GFIN, HMDA, money management

WASHINGTON, D.C. – CFPB Highlights June 11th marks the first six months of Director Kathleen L. Kraninger leading the Consumer Financial Protection Bureau.

“It is an honor and privilege to serve American consumers. As Director, my focus is to prevent harm to consumers by using all the tools Congress gave us, including education, regulation, supervision and enforcement. I look forward to building on the efforts and progress of these first six months,” said Director Kraninger.

Under Director Kraninger’s leadership, the Bureau:

Educated consumers about financial products and money management

Launched an initiative, Start Small, Save Up, to increase emergency savings among consumers;
Expanded the Misadventures in Money Management financial education tool for active-duty servicemembers;
Educated consumers about mortgage closing scams;
Educated consumers on debt collection, including steps they can take to resolve a debt, telling the difference between a legitimate debt collector and scmmer, and top debt collection questions answered;
Performed an extensive analysis and report on what suspicious activity reports reveal about elder financial exploitation;
Provided technical assistance to VITA (Volunteers in Tax Assistance) sites in how to support the people who they serve in making choices about saving part of the tax refund;
Issued a set of reports for use by state and local leaders working to set up child savings programs;
Released an education page on financial preparedness for a disaster;
Received and handled 170,000 consumer complaints;
Released a financial well being practitioner toolkit for use by financial educators;
Provided consumers a list with contact information on specialty credit reporting companies;
Educated servicemembers and other consumers on new credit freeze protections, jointly with the FTC;
Released an action booklet on building and managing credit for consumers as part of the Your Money, Your Goals;
Continued to provide the Your Money, Your Goals guide to service providers to use as they inform individuals transitioning from incarceration on financial information and tools to manage their financial lives;
Released two snapshots focused on mortgage and servicemembers complaints;
Facilitated the training of over 1,700 social services staff with information and action steps in money management that they can share with the people who they serve; and
Reached 25 million publications distributed and 25 million hits on its web service, AskCFPB, over the life of these services.

“Congress charged the Bureau with conducting financial education programs and ensuring consumers receive timely and understandable information to make responsible decisions about financial transactions. We will continue to look for ways to release innovative financial education tools and partner with public and private sector entities engaged in consumer financial education to maximize the reach of these tools,” said Director Kraninger.

Examined to Promote Compliance and Enforced the Law

Took action against one of the 10 largest HMDA reporters for violating HMDA and Regulation C;
Took action against a mortgage servicer for violating the Consumer Financial Protection Act; RESPA; Regulation X; the Truth in Lending Act; and Regulation Z;
Filed a law suit against a debt collection firm for violating the Consumer Financial Protection Act and the Fair Debt Collection Practices Act;
Filed a law suit against a credit repair company and several related entities alleging that they violated the Consumer Financial Protection Act and also the Telemarketing Sales Rule;
Took action against a student loan servicing company that engaged in unfair practices that violated the Consumer Financial Protection Act;
Took action against a company that violated the Consumer Financial Protection Act; the Gramm-Leach-Bliley Act; Regulation P; the Truth in Lending Act; and Regulation Z;
Took action against an online lender that extends unsecured payday and installment loans for violating the Consumer Financial Protection Act;
Took action against an individual who brokered contracts offering high-interest credit to veterans for violating the Consumer Financial Protection Act;
Took action against a company for violating the Consumer Financial Protection Act, the Truth in Lending Act; and Regulation Z;
Took action against a federally chartered savings association for violating the Consumer Financial Protection Act; the Electronic Fund Transfer Act; and Regulation E;
Sought to enhance protections for servicemembers;
Secured over $12 million in redress for consumers and $22 million in Civil Money Penalties; and
Announced changes to policies regarding Civil Investigative Demands (CIDs) to ensure they provide more information about the potentially wrongful conduct under investigation.

“Enforcement is an essential tool Congress gave the Bureau – particularly because education, rulemaking, and supervision will not prevent every violation. We will use enforcement against bad actors who don’t comply with the law. Ensuring that justice is served in the public interest – that is our goal in using the enforcement tool. Further, a purposeful enforcement regime can foster compliance, help prevent consumer harm, and right wrongs,” said Director Kraninger.

Modernized, clarified, and reduced burden of rules

Issued the first proposed rulemaking to implement the requirements and prohibitions applicable to debt collectors under the Fair Debt Collection Practices Act since it was passed in 1977;
Became a coordinating member of the Global Financial Innovation Network (GFIN), a world-wide effort to promote financial innovation that benefits consumers;
Published a request for information concerning the need for and scope of exceptions under the Remittances Rule;
Issued an Advance Notice of Proposed Rulemaking to commence developing proposed regulations addressing PACE financing, a relatively new form of financing of home improvements for environmental purposes;
Issued new written guidance to clarify the TRID Rule and thereby promote mortgage firms’ compliance with the rule;
Issued new standards the agency will use to meet its obligations under Section 610 of the Regulatory Flexibility Act to conduct reviews of certain rules to evaluate their burden on small businesses;
Issued comprehensive assessment reports evaluating the effectiveness of the ATR-QM and Mortgage Servicing (Regulation X) Rules to comply with Section 1022 of the Dodd-Frank Act;
Published proposed rules to delay implementation of and to reconsider the Mandatory Underwriting Provisions of the small dollar rule;
Published proposed rules to reconsider the mortgage reporting thresholds in the 2015 HMDA Rule and published an advance notice of proposed rulemaking to obtain information to assist in the development of proposed rules to reconsider data points in the 2015 HMDA Rule.
Issued final policy guidance explaining how the Bureau will modify publicly disclosed HMDA data to protect the privacy of consumers; and
Commenced implementation of measures to streamline and improve the Bureau’s rulemaking process, such as providing materials to the public that are easier to understand, receiving more feedback from small businesses on proposals, planning to release SBREFA panel reports earlier in the process, maximizing public engagement by generally using a 90 day comment period for complex proposals, and posting all comments submitted in rulemakings to the public docket.

CFPB Director Kathleen L. Kraninger
“I am committed to improving the Bureau’s rulemaking process as it will lead to better policy outcomes,” said Director Kraninger. “Improving the rulemaking process will ensure we have clear rules of the road that protect consumers and more effectively execute the Bureau’s mission. This process will increase transparency, public engagement, and thorough, data-driven analysis. To further improve our regulatory process we are developing a way to obtain input from state and local officials, as well as an initiative to ensure that outdated, unnecessary, or unduly burdensome regulations are identified and addressed.”

During her first six months, Director Kraninger has also visited all of the Bureau’s regional offices throughout the country and engaged with regional staff, as well as participated in an on-site exam. In this time, Director Kraninger has engaged with over 600 consumer groups, consumers, state and local government officials, military personnel, financial institutions, academics, non-profits, and former and current Bureau advisors, and traveled to 10 states. Lastly, Director Kraninger announced enhancements to the Bureau’s advisory committees and announced a symposia series aimed at stimulating a proactive and transparent dialogue in the policy development process.

CFPB Proposes Regulations to Implement the FDCPA

May 13, 2019 by industryspread Leave a Comment Filed Under: Regulatory Annoucements Tagged: CFPB, Consumer Financial, Consumer Financial Protection Bureau, consumers, Fair Debt Collection Practices Act, FDCPA, NPRM, regularly, rule

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (Bureau) issued a Notice of Proposed Rulemaking (NPRM) to implement the Fair Debt Collection Practices Act (FDCPA). The proposal would provide consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts. Among other things, the NPRM would set clear, bright-line limits on the number of calls debt collectors may place to reach consumers on a weekly basis; clarify how collectors may communicate lawfully using newer technologies, such as voicemails, emails and text messages, that have developed since the FDCPA’s passage in 1977; and require collectors to provide additional information to consumers to help them identify debts and respond to collection attempts.

CFPB Director Kathleen L. Kraninger
“The Bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” said CFPB Director Kathleen L. Kraninger. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received.”

The proposed rule can be found at: https://files.consumerfinance.gov/f/documents/cfpb_debt-collection-NPRM.pdf.

Prior to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Congress had not delegated to any agency the authority to issue substantive rules to interpret the FDCPA. The Dodd-Frank Act delegated that authority to the Bureau. Today’s proposal would:

Establish a clear, bright-line rule limiting call attempts and telephone conversations: The proposed rule generally would limit debt collectors to no more than seven attempts by telephone per week to reach a consumer about a specific debt. Once a telephone conversation between the debt collector and consumer takes place, the debt collector must wait at least a week before calling the consumer again.
Clarify consumer protection requirements for certain consumer-facing debt collection disclosures: The proposed rule would require debt collectors to send consumers a disclosure with certain information about the debt and related consumer protections. This information would include, for example, an itemization of the debt and plain-language information about how a consumer may respond to a collection attempt, including by disputing the debt. The proposal would require the disclosure to include a “tear-off” that consumers could send back to the debt collector to respond to the collection attempt.
Clarify how debt collectors can communicate with consumers: The proposed rule would clarify how debt collectors may lawfully use newer communication technologies, such as voicemails, emails and text messages, to communicate with consumers and would protect consumers who do not wish to receive such communications by, among other things, allowing them to unsubscribe to future communications through these methods. The proposed rule would also clarify how collectors may provide required disclosures electronically. In addition, if consumers want to limit ways debt collectors contact them, for example at a specific telephone number, while they are at work, or during certain hours, the rule clarifies how consumers may easily do so.
Prohibit suits and threats of suit on time-barred debts and require communication before credit reporting: The proposed rule would prohibit a debt collector from suing or threatening to sue a consumer to collect a debt if the debt collector knows or should know that the statute of limitations has expired. The proposed rule also would prohibit a debt collector from furnishing information about a debt to a consumer reporting agency unless the debt collector has communicated about the debt to the consumer, such as by sending the consumer a letter.

The public is invited to submit written comments on the proposed rule. The Bureau will carefully consider comments received before a final regulation is issued.

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.

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

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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/