1. Federal And State Consumer Enforcement Actions

2. New Federal and State Authority The Bureau of Consumer Financial Protection State Attorneys General

3. “The Bureau” Unusual Structure Independent executive agency No decision-making board – power vested in single Director Not dependent on annual Congressional appropriations – funded by annual transfers from Federal Reserve System Consumer Advisory Board Oversight Council – may stay or set aside rule by 2/3 vote

4. “The Bureau” Broad Rule-Making Authority Exclusive rulemaking authority over Federal consumer financial protection Existing authority transferred, including: Federal Reserve OCC OTS FDIC NCUA “Designated Laws”

5. “The Bureau” Designated Laws include: Alternative Mortgage Transactions Parity Act of 1982 Consumer Leasing Act of 1976 ECOA Electronic Fund Transfer Act (“EFTA”) Fair Credit Billing Act Fair Credit Reporting Act (“FCRA”) (subject to certain exclusions) Fair Debt Collection Practices Act Gramm-Leach-Bliley Act (certain privacy provisions) Home Ownership and Equity Protection Act of 1994 Home Owners Protection Act Real Estate Settlement Procedures Act (“RESPA”) S.A.F.E. Mortgage Licensing Act of 2008 Truth in Lending Act (now expanded)

6. “The Bureau” Broad Rule-Making Authority Exclusive rulemaking authority over Federal consumer financial protection Existing authority transferred, including: Federal Reserve OCC OTS FDIC NCUA “Designated Laws” Plus new authority granted, including: Prohibiting unfair, deceptive or abusive practices Mandating particular disclosures Prohibiting or restrict pre-dispute arbitration practices

7. “The Bureau” Limited Transfer of Authority from Federal Trade Commission Assumes authority of FTC to issue guidelines, conduct a study, or issue a report mandated under Designated Laws Does not affect authority of the FTC under the Federal Trade Commission Act or any law that is not a Designated Law

8. Truth in Lending Act New Truth in Lending Requirements (Mortgage Reform and Anti-Predatory Lending Act) 129B – Prohibition on Steering Incentives 129C – Minimum Standards for Residential Mortgage Loans 129D – Escrow Accounts 129E and H – Appraisal Requirements 129F – Proper Crediting of Home Loan Payments 129G – Requests for Payoff Amounts

9. “The Bureau” Not just a rule-maker, but also an enforcer. Power to issue subpoenas for documents and for oral testimony. Power to issue cease and desist orders. Power to commence litigation in federal court.

10. State Attorneys General Federal Preemption Disfavored As general rule, State laws are not preempted except to the extent inconsistent with the new federal law and only to the extent of the inconsistency. A state law providing greater protection to consumers is not treated as inconsistent. State consumer financial laws are preempted as applicable to national banks only if the law (a) is discriminatory or (b) prevents/interferes with exercise of national banks powers or (c) subject to preemption by federal law outside Title X of Dodd-Frank.

11. State Attorneys General State Attorneys General May Enforce Federal Law Laws Enforceable by State in Civil Action Title X of Dodd-Frank (Bureau of Consumer Financial Protection) Regulations issued by the Bureau Expanded Truth in Lending Act FTC rules re mortgage loan appraisal State may sue, as parens patriae for state residents, in appropriate state or federal court. Remedies that may be sought by State Injunction Damages Restitution Other equitable relief Statutory penalties Costs and Attorneys Fees Advance notice to federal government required, where feasible.

12. State Attorneys General How will Attorneys General use their power? Two competing “camps” Possible issue of state law authorization Investigations, including administrative subpoenas Litigation - including use of outside counsel Multi-state actions NAAG Settlements