The Filing Cabinet

As the Consumer Financial Protection Bureau weakens, state agencies—mini-CFPBs if you will—may step up to fill the void.

The battle for who is the rightful head of the Consumer Financial Protection Bureau has been settled—for the moment—by Judge Timothy Kelly.

Ally Financial recently became the latest auto-lending company to face a government investigation into its subprime auto lending practices. In the last few months, GM Financial and Santander Consumer USA Holdings have received subpoenas from the Department of Justice for similar practices, raising questions among some as to whether the next subprime crisis will come in the form of auto loans. Details inside.

Bank regulators, along with the Securities and Exchange Commission, Federal Housing Finance Agency, and U.S. Department of Housing and Urban Development have jointly issued a final rule that imposes credit risk retention requirements on sponsors of asset-backed securities. The rule requires sponsors to hold at least 5 percent of the credit risk of the assets underlying the securities. The rule includes exemptions for mortgage-backed securities collateralized by residential mortgages that meet "qualified mortgage" criteria established by the Consumer Financial Protection Bureau.

If you were already alarmed by the reputational headaches and compliance challenges inherent in the Consumer Financial Protection Bureau’s complaint database, there is now even more to worry about. The Bureau is making the narratives behind those complaints public.

The House of Representatives, with a 401-2 vote, has approved legislation that requires the Consumer Financial Protection Bureau to comply with Federal Advisory Committee Act transparency requirements. The Federal Reserve, CIA, and CFPB are among the agencies not covered by the law. More inside.

The Consumer Financial Protection Bureau has made the consumer narratives collected by its controversial complaint database publicly available. In March,  the CFPB formalized its policy for accepting and disclosing the complaint narratives. Last week, more than 7,700 of those complaints—lodged against banks, credit card companies, and other consumer-dealing financial firms—were made public for the first time. Details inside.

A small Texas bank scored a potentially big victory last week when a federal appeals court ruled that it has standing to challenge the constitutionality of the Consumer Financial Protection Bureau. The decision, overturning a 2013 district court ruling, rejected a similar challenge to the Financial Stability Oversight Council and its process for determining systemically important financial institutions. More inside.

Before breaking for August recess, the House Financial Services Committee delivered a potential blow to the Consumer Financial Protection Bureau’s oversight of non-bank lenders. The bill, "Reforming CFPB Indirect Auto Financing Guidance Act of 2015," advanced with a bipartisan vote of 47-10, would repeal a CFPB bulletin from 2013  that targeted discriminatory auto loan lending practices.

The Consumer Financial Protection Bureau is moving forward with new rules that would prohibit the mandatory arbitration clauses in contracts that banks, credit card companies, and others rely upon to prevent consumers from pursuing lawsuits. A variety of recommendations, published this week for public comment, are the results of a study that was required by the Dodd-Frank Act and released in March.

The Consumer Financial Protection Bureau has concluded its most recent review of complaints filed with the agency. As of Dec. 1, 2015, the CFPB handled 770,100 complaints nationally and the report notes that, in a year-to-year comparison of data from September to November, complaints about prepaid products rose 215 percent. The report also focuses on money transfer businesses. 

Mortgage servicers, lenders, and aggregators received welcomed news from CFPB Director Richard Cordray, who wrote in a letter to the Mortgage Bankers Association that technical errors will mean non-compliance with new "Know Before You Owe" mortgage disclosure rules. Because “there inevitably will be inadvertent errors in the early days,” the CFPB’s initial examinations for compliance with the new rules “will be sensitive to the progress industry has made,” he wrote.

A rule proposed on June 2 by the Consumer Financial Protection Bureau includes its toughest attack yet on payday and title loans. Proposed requirements include a “full-payment” test requiring lenders to determine upfront that consumers can afford to repay what they borrow. Joe Mont has more.

Is the Wells Fargo Wagon a-comin’ down an ethical street? The banking giant has been hit with the largest fine ever ($185M) by the Consumer Financial Protection Bureau in addition to terminating 5,300 employees and redoubling efforts to establish an ethical culture. Joe Mont reports.

The Consumer Financial Protection Bureau has announced the procedures its examiners will use when identifying consumer harm and risks related to the Military Lending Act. Joe Mont has more.

Joe Mont looks at new CFPB rules for prepaid financial products—including innovative online and mobile offerings from PayPal, Google, and Apple—that will require enhanced customer protections.

A 2-1 ruling by a judicial panel of the U.S. Court of Appeals for the D.C. Circuit says that the Consumer Financial Protection Bureau, as currently composed, is unconstitutional. Joe Mont has more.

The CFPB is warning the financial world to be leery of sales quotas that can lead to consumer harm and legal violations. Joe Mont has more on a bulletin from the Bureau that addresses best practices for a targeted compliance monitoring program.

With a slate of rules targeting the industry in the pipeline, the Consumer Financial Protection Bureau has released a tally of consumer complaints related to debt collection. More from Joe Mont.

As they stockpile ammunition in their efforts to remove CFPB Director Richard Cordray, House Republicans are claiming that recent auto lending rules by the Bureau are illegal. Joe Mont has more.

Democrats and Republicans alike are pushing legislation that could greatly affect regulators and regulations. Among the efforts is a Republican-led effort to kill the SEC’s extractive payments rule, writes Joe Mont.