On December 7^th, Law 360  published an article on the CFPB’s larger participant rule for debt collectors that was authored by David N. Anthony, Alan D. Wingfield, Virginia Bell Flynn, and H. Scott Kelly.

On October 31, 2012, the CFPB released its first report highlighting its supervisory activity between July 2011 and September 30, 2012.  Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB is authorized to supervise depository institutions with over $10 billion in assets, non-depository financial institutions and “larger participants” in the credit reporting and debt collection markets.  Given Director Cordray’s public statements expressing a preference for the CFPB’s exercise of its supervisory authority as the primary means through which the Bureau will compel compliance with federal consumer protection law, the Supervisory Highlights (“Highlights” or “report”) provide covered entities with a useful guide for understanding the CFPB’s supervisory expectations and for developing compliance management systems to comply with federal consumer protection law. [Read more →]

David N. Anthony, co-leader of the Financial Services Litigation practice group, was recently quoted in the Law360 article titled, “Watchdog, Banks Push For Review of CFPB Exam Process.”  Specifically, David noted that the recent report issued by the CFPB Ombudsman’s Office, while a step in the right direction, will not change the fact that enforcement attorneys will be present from the beginning in supervision examinations.

 For a copy of the Law360 article and/or questions, please contact us at CFPB@troutmansanders.com.

Credit and Collection News and Troutman Sanders are proud to present:

The Consumer Financial Protection Bureau & State Attorneys General Compliance Webinar

With the recent celebration of its first birthday, the CFPB has found its footing.  Moving aggressively towards investigative, supervision and enforcement actions, the CFPB has collected over a half a billion dollars in penalties from numerous financial services companies. With the CFPB in active pursuit of large financial penalties and information for its consumer “library”, the Bureau also is engaging its enforcement arm – state Attorneys General – to wage an aggressive, coordinated, and proactive effort to reform the debt collection industry.  Moreover, with the creation of and the continuing revision of the supervision and examination manual for debt collectors, financial services companies must be primed and ready for the inevitable CFPB assault. Indeed, the historic first lawsuit filed by the CFPB was filed against a debt collection law firm, which reflects the priority the CFPB has placed on “reforming” this industry. [Read more →]

            The Consumer Financial Protection Bureau’s (CFPB) ombudsman released its first annual report detailing its activities from July 2011 through September 30, 2012.  The report provides background on the role of the Ombudsman, which includes providing “a fair process as between consumers, the providers of consumer financial products and services and the CFPB.”  The report also addresses the issues it has dealt with over the past ten months.   The report noted that the Ombudsman has undertaken two systemic reviews as well as handled over 700 individual consumer inquiries, ranging from questions concerning the CFPB’s interactions with consumers to website usage.

What Does It Say?

            The first major review related to consumers’ lack of knowledge about the CFPB consumer complaint process, which is located prominently on its main website.  According to the report, consumers remain unclear about how the complaint process works, noting, for example, that consumers did not understand the timing for certain steps in the process. The Ombudsman recommended that the CFPB provide additional information to consumers about the process in any future oral or written communications.

            The second review concerned the presence of enforcement attorneys at supervisory exams. The CFPB takes an integrated approach to supervision and enforcement – enforcement attorneys are present at the beginning, middle and end of the supervisory examination. This practice, a cause for concern among providers of consumer financial products and services, was examined by the Ombudsman, which spoke individually to bank officials, outside consultants and CFPB staff.  As a result, the Ombudsman recommended that the CFPB review its approach and, until a full review is complete, establish ways to clarify the role of the enforcement attorney at the supervisory examination.

The Consumer Financial Protection Bureau (CFPB) recently issued regulations that require revisions of three critical forms required by the Fair Credit Reporting Act (FCRA), which are often used in the background screening process.  The CFPB updated three notices, which the FCRA requires employers and consumer reporting agencies (CRAs) to send to consumers, furnishers of data to CRAs, and users of consumer reports. Under the regulations, employers and CRAs must begin using the updated forms by…

To read the full Troutman Sanders CFPB advisory, click here.

On October 24, 2012, Law 360 published an article on the CFPB’s new larger participant rule, upon which we previously reported.  In the article, David N. Anthony, the Financial Services Co-Practice Group Leader and a partner at Troutman Sanders, was quoted as saying that “because of the legal precedent, [Read more →]

For the first time, the federal government will directly supervise non-bank consumer debt collectors. On October 24, 2012, the Consumer Financial Protection Bureau (CFPB) published its second “larger participant rule,” defining those debt collectors who will be subject to the CFPB’s enforcement power. The CFPB also released the field guide that examiners will use to ensure that companies and banks engaging in debt collection are following the law.

In an attempt to touch as many companies as possible, the three types of businesses which are included in this rule include…

To read the full Troutman Sanders CFPB advisory, click here.

As part of a settlement reached on Monday, October 1, American Express Corporation has agreed to pay a $112.5 million penalty for alleged consumer-rights violations, including deceptive credit card marketing and debt collection practices. American Express will refund $85 million to approximately 250,000 customers and forfeit $27.5 million in fines to the four regulators who brought the enforcement action — the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corp., Federal Reserve Board, and Office of the Comptroller of the Currency. The credit card company has until March 2013 to present refunds to its customers, according to the consent orders (1,2, and 3) signed by the parties. The different consent orders were entered into by three American Express subsidiaries that allegedly committed the violations: American Express Centurion Bank (AECB), American Travel Related Services Company Inc., and American Express Bank FSB.

To read the full Troutman Sanders CFPB advisory, click here.

After a bench trial, the West Virginia state court awarded the state attorney general judgment against CashCall for violations of the West Virginia Consumer Credit Protection Act (WVCCPA). The two-part judgment included over $15 million in damages, restitution, civil penalties, and cancelled debt.

To read the full Troutman Sanders CFPB advisory, click here.