Congratulations, It’s A Regulatory Agency! The CFPB Is Open For Business.

The Consumer Financial Protection Bureau (CFPB), the new Federal agency responsible for regulating consumer protection, opened its doors on July 21, 2011. For your reference, here’s a first roundup of what you need to know about the new agency, provided by lawyers and law firms publishing their work on JD Supra:

Launch of the CFPB (Venable LLP):

“The CFPA established the new Consumer Financial Protection Bureau (CFPB) within the Federal Reserve System to regulate the offering and provision of consumer financial products or services. … In September 2010, the Treasury Secretary announced July 21, 2011 as the designated transfer date. The designated transfer date has now arrived. This issue of the Venable CFPB Watch describes several of the first formal efforts of the new bureau.” Read more»

President Nominates Richard Cordray as Director of CFPB (BuckleySandler LLP):

“On July 17, President Obama announced his intention to nominate Richard Cordray as the director of the Bureau of Consumer Financial Protection (CFPB), which requires Senate confirmation. Mr. Cordray was originally tapped last December to serve as the CFPB’s Chief of Enforcement.” Read more»

Regulatory Oversight

Consumer Financial Protection Bureau Opens for Business: The Implications for Debt Relief Service Providers and Housing Counseling Agencies (Venable LLP):

“Today, the Consumer Financial Protection Bureau (the ‘CFPB or the Bureau) opens for business. One year ago, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), including the Consumer Financial Protection Act, which created the CFPB. Now the CFPB will be a cop on the beat to enforce consumer financial protection laws, declare individual acts or practices to be unfair, deceptive, or abusive, and regulate nonbank and bank providers of consumer financial products and services.” Read more»

Consumer Financial Protection Bureau Outlines Bank Supervision Approach (Katten Muchin Rosenman LLP):

“The Consumer Financial Protection Bureau (CFPB) on July 12 outlined its approach to supervising the 111 large banks with more than $10 billion in assets that it will oversee beginning July 21. Starting on July 21, we will be a cop on the beat—examining banks and protecting consumers, said Treasury Department special adviser Elizabeth Warren, who is overseeing the establishment of the CFPB.” Read more»

Alternative Mortgage Transaction Parity Act (Interim Rule) (Jonathan Foxx):

“After July 21, 2011 Dodd-Frank provides that state housing creditors may only make alternative mortgage transactions under AMTPA if they comply with rules issued by the CFPB, even though Dodd-Frank does not vest the CFPB with authority to issue such rules before that date…. Accordingly, CFPB interim rules are needed immediately in order to avoid a suspension in the operation of AMTPA, which would prevent state housing creditors from making variable rate loans and other alternative mortgage transactions in states where such loans are otherwise prohibited by state law.” Read more»

Real Estate Alert – Summer 2011: Interstate Land Sales Full Disclosure Act (Nexsen Pruet, PLLC):

“Today, July 21, 2011, registration and enforcement jurisdiction over the Interstate Land Sales Full Disclosure Act (ILSA) moves from the Office of Interstate Land Sales under the Department of Housing and Urban Development (HUD”) to the Bureau of Consumer Financial Protection (CFPB) under the Department of Treasury, established by the Consumer Financial Protection Act of 2010, a/k/a Dodd-Frank, and organized by Elizabeth Warren at the direction of the President.” Read more»

CFPB Targets Nonbanking Consumer Financial Markets for Supervision (Venable LLP):

“Under the Consumer Financial Protection Act (the ‘Act’ or the ‘CFPA’), Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act – the CFPB must issue an initial ‘larger participant’ rule no later than July 21, 2012, one year after the CFPB will be up and running. Once the scope of the nonbank supervision program is established, the operation of the program will be based on an assessment by the CFPB of the ‘risks posed to consumers in the relevant product markets and geographic markets.’” Read more»

FTC Rescinds FCRA Commentary in Handoff to CFPB (Morrison & Foerster LLP):

“Earlier this week, the Federal Trade Commission (‘FTC’) withdrew its Statements of General Policy or Interpretations under the Fair Credit Reporting Act (‘FCRA’), which includes the FTC’s Commentary on the Fair Credit Reporting Act (‘Commentary’)… The FTC withdrew its Commentary and issued its staff report one day before the ‘Designated Transfer Date,’ the appointed day on which the Consumer Financial Protection Act (‘CFPA’) became effective, and authority to enforce and administer the various consumer credit protection laws, including the FCRA, transferred to the new Consumer Financial Protection Bureau (‘CFPB’).” Read more»

CFPB Targets Debt Relief Services Market for Supervision (Venable LLP):

“On June 23, 2011, the Consumer Financial Protection Bureau (CFPB) announced it had targeted debt relief services as one of six nonbanking consumer financial market areas that could be classified as larger participants and subject to supervision by the CFPB. … The CFPB’s announcement, in the form of a Notice and Request for Comment (the Notice), was made in preparation for an eventual rulemaking on a key element of the agency’s nonbank supervision program: the statutory requirement to define who is a larger participant in certain consumer financial markets.” Read more»

Additional Analysis

Important Comment Period on Nonbank Regulation (Sutherland Asbill & Brennan LLP):

“On June 23, the Bureau of Consumer Financial Protection (CFPB) invited preliminary comment on future rulemaking the Bureau will undertake under Section 1024 of the Consumer Financial Protection Act of 2010. Under Section 1024, the Bureau is required to construct a supervisory regime for residential mortgage, private education lending and payday lending firms, as well as the larger participants of other product and service markets that the Bureau defines in rulemaking.” Read more»

Heat Maps and Mortgage Disclosure (Jonathan Foxx):

“The Consumer Financial Protection Bureau (CFPB) has taken an innovative approach toward designing the forthcoming, combined Good Faith Estimate and Truth in Lending Disclosure (Mortgage Disclosure): it is using heat maps to determine viewer orientation to information stated on the Mortgage Disclosure. This is part of the CFPB’s Know Before You Owe project.” Read more»

Announcing Online Tool: Venable CFPB Monitor (Venable LLP):

“The Venable CFPB Monitor provides links to regulatory initiatives by the CFPB with their corresponding statutory provisions. In addition, the Monitor includes other publically available reports and analysis to assist in examination of the CFPB’s activities in a particular industry segment.” Read more»

Defining “Larger Participant” (Jonathan Foxx):

“Under Dodd-Frank, the CFPB’s non-bank supervision program will be able to look at companies of all sizes in the mortgage, payday lending, and private student lending markets. For all other markets – such as consumer installment loans, money transmitting, and debt collection – the CFPB generally can supervise non-banks only if they are larger participants in these markets.” Read more»


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