2 A (very brief) timeline Presentation TitleThursday, April 06, 2017A (very brief) timeline2007The United States starts facing its most significant financial crisis since the Great Depression.2009President Obama proposes a consumer-protection bureau as part of Wall Street reform.July 21, 2010The Dodd-Frank Wall Street Reform and Consumer Protection Act becomes law. Implementation of CFPB begins immediately under the Treasury Department.July 21, 2011The CFPB becomes a bureau.January 4, 2012Richard Cordray named the first Director of the CFPB
3 A consumer finance marketplace… Presentation TitleThursday, April 06, 2017Our VisionA consumer finance marketplace…where customers can see prices and risks up front and where they can easily make product comparisons;in which no one can build a business model around unfair, deceptive, or abusive practices;that works for American consumers, responsible providers and the economy as a whole.
4 Many Different Approaches The CFPB Toolbox:Many Different ApproachesSupervision/Examination/EnforcementResearch, Markets & RegulationsConsumer ResponseConsumer Education & EngagementExternal Affairs
5 Scope of AuthorityEnumerated Statutes that the CFPB can Implement and Enforce (as listed in Sec. 1002(12))Alternative Mortgage Transaction Parity ActConsumer Leasing ActElectronic Fund Transfer ActEqual Credit Opportunity ActFair Credit Billing ActFair Credit Reporting ActHome Owners Protection ActFair Debt Collection Practices ActFederal Deposit Insurance Act (selected sections)Gramm-Leach-Bliley Act (selected sections)Home Mortgage Disclosure ActHome Ownership and Equity Protection ActInterstate Land Sales Full Disclosure ActOmnibus Appropriations Act of (section 626)Real Estate Settlement Procedures ActS.A.F.E. Mortgage Licensing ActTruth in Lending ActTruth in Savings ActAlternative Mortgage Transaction Parity ActGoverns adjustable rate mortgagesDisclosures covered and enforced under TILAEqual Credit Opportunity Actprohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because a person receives public assistanceHome Owners Protection ActAlso known as PMI cancellation ActProtects homeowners from having to pay PMI for the life of the loanAllows cancellation under specified circumstancesHome Mortgage Disclosure ActRequires financial institutions to report loan dataShowing whether financial institutions are serving the housing needs of their communities;To help identify possible discriminatory lending patterns.Home Ownership and Equity Protection ActInterstate Land Sales Full Disclosure Act (ILSA)Real Estate Settlement Procedures Act (RESPA) -- formerly with HUDRequires that consumers be given clear information about the cost of mortgage settlements and protected from unnecessarily high settlement charges caused by certain abusive practices.Standard GFEs to facilitate shoppingImproved disclosures about costs and termsImproved HUD-1S.A.F.E. Mortgage Licensing Act -- Formerly with HUDencouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originatorsestablish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industrysets a minimum standard for licensing and registering mortgage loan originators.Truth in Lending Act (TILA)
6 Depository Institution Supervision CFPB has authority to supervise and examine banks and credit unions with assets exceeding $10 billion, their affiliates and their service providers.Dodd-Frank defines "affiliates" to include any person that controls, is controlled by, or is under common control with another person. (Sec (1))"Service providers" are defined as companies providing a material service to a covered institution. (Sec. 1002(26)) "Material services" include designing, operating, or maintaining a consumer financial product or service and processing related transactions.
7 Non-Depository Supervision Firms Subject to CFPB’s Nonbank Supervision Program Under Section 1024All sizes of nonbank firms that offer or provide:Origination, brokerage, or servicing of residential mortgage loans, or loan modification and foreclosure relief services related to such loansPayday loansPrivate education loansFor other markets of consumer financial products or services, a “larger participants” of these markets as the CFPB defines by rule.Initial rule to be issued by July 21, 2012.Issued Notice and Request for Comment on larger participant rulemaking on June 29th, which asked in part how a larger participant in specific industries should be defined (over 10,400 comments received)Other entities that the CFPB has reasonable cause to determine engage in conduct that poses risks to consumers related to consumer financial products or services, after notice and a reasonable opportunity to respondCAdd cites
8 Research, Markets & Regulation Selected Reports Available onImpact of the CARD Act of 2009Use of Remittance History for Credit Scores and Remittance Exchange RatesVariation in Credit ScoresFair Debt Collection Practices Act
9 Consumer Response www.consumerfinance.gov Consumer Response now accepts complaints related to all bank products, including:credit cardsmortgagesall bank accountsprivate student loansHelp available in 187 languages(855) 411-CFPB (2372) (Eng./Esp.)TTY/TDD (855) 729-CFPB (2372)Tell Your Story portal
10 CEE’s Offices Financial Education Consumer Engagement Provide targeted educational contentIdentify and promote effective fin ed practicesConsumer EngagementCreate interactive, informative relationship with consumersServicemembersImprove financial protectionEscalate complaintsCoordinate w/ DoD, etc.millionOlder AmericansProtect against financial abuseImprove financial literacyPlanning for life events50 million aged 62+StudentsIncrease awareness of debt in college choiceBuild campus awareness22-28 million (age 16-26)EmpowermentFinancialImprove financial stability for working families/new entrants30 million underbanked46 million lower income
14 ConsumerFinance.gov/askcfpb SENSITIVE AND PRE-DECISIONAL FOR INTERNAL USE ONLY
15 Office of Financial Education Objectives: Build a comprehensive approach to financial education in the U.S. Develop knowledge about what works in financial education and provide opportunities for financial educators to learn about effective strategiesPromote innovation: Test new ideas and share successful innovations with the fieldEducate consumers: Provide understandable information to consumers that helps them make informed financial decisionsIncrease federal coordination: Director of the CFPB serves as the vice chair of the Financial Literacy and Education Commission
16 Build a comprehensive approach to financial education Build knowledge about what worksStrengthen the fieldCommission evaluations of promising financial education projectsLink financial educators and researchers with each other in a learning networkShare best practicesFour listening sessions with financial education practitionersAdditional webinarsTax-time savings materials for VITA sitesTitle YYYY/MM/DD
17 Promote Innovation Identify existing innovations in the field Seed new innovations in the field
18 Educate ConsumersAspires to be a trusted resource for information for consumers and practitionersIdentify and share innovative practices and communication strategies in financial educationWork to provide consumer-focused materials in everyday languageInformMotivateHelp consumers achieve their own financial goals
19 Improve Federal Coordination FLEC is a 21-member federal commission charged with improving coordination on financial education among federal agenciesDodd-Frank Act names CFPB Director as the vice chairOFE is actively engaged with FLEC working groupsImprove Federal Coordination
20 How to ParticipateCFPB Blog: : CFPB CFPB Facebook: Go to ConsumerFinance.gov to sign up for our newsletter. Weigh in on current rulemakings: