The First 180 Days: The New Consumer Financial Protection Bureau

February 21, 2012

The new Bureau of Consumer Financial Protection (“CFPB”) recently completed six months following the one year passage of the Dodd-Frank Act (“Dodd Frank”). Dodd Frank created the CFPB as an independent bureau of the Federal Reserve System with direct supervisory authority over depository institutions with assets of $10 billion or more and certain consumer financial companies. Authority to implement almost all federal consumer financial protection laws and regulations were transferred from the federal banking agencies to the CFPB on July 21, 2011. Assets under $10 billion? The CFPB’s broad authority to issue, interpret, and enforce almost all federal consumer protection laws and its issuance of applicable disclosure forms, will significantly impact ALL bank consumer compliance programs.

On January 20, 2012, the CFPB published its Regulatory Agenda specifying that it will be issuing at least 14 rules between now and October 2012, including:

  • TILA amendments implementing the ability-to-repay requirements, mandatory escrow accounts for higher priced mortgage loans, high-cost mortgages, appraisals, and loan originator compensation standards;
  • TILA and RESPA amendments, including periodic mortgage disclosures, force-placed hazard insurance, handling of payoff amount requests, and integration of TILA/Reg. Z and RESPA/Reg. X; and
  • Expanded HMDA collection and reporting requirements.

Also, as part of its “Know Before You Owe” program, designed to help consumers understand the terms of their credit transactions, the CFPB is currently testing a new consolidated TILA and HUD-1 disclosure form and a new credit card agreement template. Additionally, the CFPB has issued a financial aid shopping sheet for student loans.

With significant changes underway, not to mention future regulatory issuances, it will be increasingly important in the Dodd-Frank era to closely monitor the future actions of the CFPB.

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