Posts Tagged ‘The Consumer Financial Protection Bureau’

Bill would Give a Voice to Smaller Lenders within the Consumer Financial Protection Bureau

August 17th, 2015 Comments off

cfpb_credit_cfpbA measure introduced in the Senate by U. S. Senators Mike Rounds (R-SD) and Angus King (I-ME) would give community banks, credit unions and small businesses a say in the Consumer Financial Protection Bureau’s (CFPB) rulemaking process, according to what dsnews tells MHProNews.

Known as the Bureau of Consumer Financial Protection Advisory Board Enforcement Act, S. 1963 would establish a small business advisory board within the CFPB, as well as create permanent community bank and credit union panels within the CFPB. The panels would represent members from rural and underserved areas.

Sen. Rounds, a member of the Senate Banking Committee, said, “As the CFPB continues to make decisions that affect every American, it is critical for rural areas, community banks, small businesses and credit unions to have a voice.” The CFPB has four advisory councils, only one of which—the Consumer Advisory Board– is required by Dodd-Frank. The new bill would create an additional advisory committee for small businesses, and codify two existing advisory boards, one for community banks and the other for credit unions.

Small businesses, community banks and credit unions are invaluable forces in America’s economy, and they deserve a seat at the table as the CFPB makes important and far-reaching financial decisions,” Sen. King said. “Rural communities in Maine, South Dakota, and all across the nation rely on these institutions to create jobs and grow the local economy.” This rings true, especially for manufactured home owners who often live in rural areas.

The goal is to gain regulatory relief for community banks and credit unions, two historical sources of funding for manufactured housing loans, many of which have had problems operating due to the increasing cost of compliance under Dodd-Frank regulations. Many of these smaller financial institutions have either gone bankrupt or merged with other institutions. A similar bill, H.R. 1195, passed in the House in April.

Rep. Randy Neugebauer (R-TX) said, After five long years of Dodd-Frank’s misguided regulatory assault on Main Street, I’m pleased the Financial Services Committee once again acted to provide regulatory relief for our community financial institutions and the hardworking Americans they serve. Washington’s one-size-fits-all rulemaking has shifted Dodd-Frank’s compliance costs down to many individuals and families—forcing them to absorb higher cost of credit while reducing their access to popular financial products.”  ##

(Image credit: Consumer Financial Protection Bureau)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Honda Agrees to Cease Discriminatory Automobile Lending

July 20th, 2015 Comments off

mortgage    andyenstallblog  creditThe Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) resolved an action with American Honda Finance Corp. over charges the auto maker’s pricing policies discriminated against people of color, resulting in their paying higher interest rates, regardless of creditworthiness, than white borrowers for auto loans.

As part of the settlement, Honda will alter its pricing system to minimize dealer discretion, which will reduce the risk of discrimination. The company will also pay $24 million in restitution to a settlement fund that will go to borrowers who were affected by the discriminatory lending from January, 2011 to July 14, 2015, as MHProNews has learned. Honda will report to the CFPB on its compensation activity.

When consumers purchase an automobile on credit, the dealer can facilitate the loan through a third-party, like Honda’s finance arm, which charges the dealer an interest rate, and then the dealer might negotiate a higher interest rate with the customer at their discretion. This formula resulted in Honda charging minority borrowers from $150 to over $250 more for their auto loans, thereby violating the Equal Credit Opportunity Act.

In addition to the $24 million restitution, Honda will also reduce or eliminate dealers’ flexibility in adding to the interest rate. The CFPB did not assess penalties against Honda because of the auto maker’s response in adjusting its policies to eliminate discriminatory lending.

The CFPB is committed to creating a fair marketplace for all consumers, and other auto lenders should take note of today’s action,” said CFPB Director Richard Cordray. “Honda’s proactive decision to move to a new pricing and compensation system demonstrates industry leadership and represents a significant step towards protecting consumers from discrimination.

As MH Pros should consider this action in the light of the CFPB regulations that impact MH lending.  Check with your attorney or state association for greater insights, ##

(Image credit: andyenstallblog)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

CFPB Defines Consumer Complaint Clearinghouse; Industry Complains

March 21st, 2015 Comments off

cfpb_credit_cfpbThe Consumer Financial Protection Bureau (CFPB) has finalized its online system for allowing consumers to file complaints on its complaint portal, as americanbanker tells MHProNews. Initially, only the name of the institution and the product was to be named, but now consumers will be able to enter a narrative of their experience, if they so choose.

While banks have argued unverified details may be included, they will have 60 calendar days to respond to a narrative complaint before the story is published, 15 days to respond to a brief complaint before it is included in the online database. In a press release, CFPB Director Richard Cordray said, “Today’s policy will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market.

The agency also offered the companies 90 days after the final policy is included in the Federal Register so they can better adjust to the system. Customers have to ‘opt in’ to provide a narrative before it is included, but may also choose to opt out at any time during the process.

Customers may begin opting in as soon as March 26.

Before the complaint can be publicized, the consumer must have a confirmed relationship with the company, the complaint cannot be a duplicate and it must be submitted through the CFPB website. The CFPB will remove all personal identification so the complainant cannot be identified.

Richard Hunt, president and chief executive of the Consumer Bankers Association, said the agency could substantiate the complaints before posting them but is not doing so. “The CFPB has the ability to demonstrate trends, allow for an appeals process, and normalize data — much like other regulators,” he said. “Puzzlingly, they choose not to use any of these illuminating mechanisms. Today’s action does not reflect the principles of accountability, transparency, and data-driven decision making which the bureau professes guides its work. This agency can do better.

The CFPB is taking public comment on how to publicize consumer compliments independent of the complaint process. ##

(Image credit: Consumer Financial Protection Bureau)

matthew-silver-daily-business-news-mhpronews-com   Article submitted by Matthew J. Silver to Daily Business News-MHProNews.