Many of Mayer Brown’s Consumer Financial Services partners will be featured at the upcoming Legal Issues and Regulatory Compliance Conference in New Orleans, sponsored by the Mortgage Bankers Association.

On Sunday, May 5, Kris Kully will help guide attendees through the basics of the Truth in Lending Act, as part of the conference’s Certified Mortgage

CFPB Director Kathy Kraninger has filed her first contested lawsuit as CFPB Director.  Somewhat surprisingly, the lawsuit seeks to enforce a Civil Investigative Demand (CID) issued by the CFPB in June 2017—under former Director Richard Cordray—to a debt collection law firm.  The petition to enforce the CID makes clear that the respondent law firm made a “final, partial, redacted production” in response to the CID in September 2017.  Clearly, therefore, this matter was pending at the CFPB throughout the year-long tenure of Mick Mulvaney, during which the agency took no action to enforce the CID. It is dangerous to read too much into this action, but it does suggest that Kraninger may take a more aggressive enforcement posture than Mulvaney, who was criticized for the sharp drop in the number of enforcement actions under his watch.

The CID at issue is a typically broad CFPB CID from that era. It contains 21 interrogatories with dozens of sub-parts, seven requests for written reports, 15 requests for documents, and, unusually, four request for “tangible things,” in this case phone recordings and associated metadata. Read as a whole, the CID seeks information regarding virtually every aspect of the respondent’s debt collection business over a period of three-and-a-half years. The CID’s Notification of Purpose is equally broad and limitless,
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While most of the federal government remained shuttered in mid-January, the Consumer Financial Protection Bureau (CFPB or the Bureau) was on the job, thinking about the Military Lending Act (MLA or the Act). On January 17, 2019, the Bureau’s Director, Kathleen Kraninger, issued a statement asking Congress to “explicitly grant the Bureau authority to conduct

Possibly hinting toward a revival of fair lending enforcement following a recent lull, the OCC’s Ombudsman recently declined a bank’s appeal of the OCC’s decision to refer the bank to both DOJ and HUD for potential Fair Housing Act violations.

The OCC’s Ombudsman oversees an infrequently used program for banks that desire to appeal agency

Oversight of the Consumer Financial Protection Bureau (Bureau) by the U.S. House of Representatives is expected to become more aggressive when the 116th Congress convenes in January 2019. On December 11, 2018, members of the new Democratic House majority nominated Representative Maxine Waters to chair the House Financial Services Committee, which oversees the Bureau. During Rep. Waters’ time as ranking member on the Committee, she heavily criticized many of the changes Acting Director Mick Mulvaney made at the Bureau. Mayer Brown summarized those changes in a recent Legal Update.

As chair, Rep. Waters will set the Committee agenda, enabling her to turn her criticism into more direct pressure on the Bureau and its new Director Kathleen Kraninger. Proposed legislation sponsored by the incoming chair may hold some clues to the actions the Committee may take.

In September 2018, Rep. Waters introduced the Consumers First Act. The bill is largely designed to restore the Bureau to how it looked and functioned before Acting Director Mulvaney’s tenure. Some of its major topics include the following:
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The Consumer Financial Protection Bureau recently proposed amendments to its earlier policy for issuing no-action letters, and proposed a process for participating in a so-called regulatory “sandbox,” which would provide certainty in or exemptions from complying with certain federal consumer protection laws. Comments on the proposals are due by February 19, 2019.

Read more in

As the Mortgage Bankers Association gathers for its Regulatory Compliance conference next week in Washington, DC, Mayer Brown’s Consumer Financial Services group will be addressing all the hot topics.

Melanie Brody will be talking about the Equal Credit Opportunity Act (ECOA) on a panel called “Fair Lending and Equal Opportunity Laws” on Sunday, September 16.

The ABA Business Law Section is holding its 2018 Annual Meeting in Austin, Texas on September 13-15, 2018. The Meeting will offer over 80 CLE programs and many more committee meetings and events, and will feature several Mayer Brown panelists.

Financial Services Regulatory & Enforcement (FSRE) partner Laurence Platt will participate in a panel

The Bureau of Consumer Financial Protection (the “Bureau”) has struck out again in trying to enforce a Civil Investigative Demand (“CID”) that contains broad and generic language about the nature of the agency’s investigation. For the second time, a US Court of Appeals has ruled that a CID issued by the Bureau was invalid because the agency failed to meet the statutory requirement that the CID identify the conduct constituting the alleged violation under investigation and the provision of law applicable to such violation, as required by 12 U.S.C. § 5562(c)(2). As we previously discussed, last year the DC Circuit ruled that a CID that the Bureau issued to a college accrediting agency failed to meet the statutory threshold when it merely identified “unlawful acts and practices in connection with accrediting for profit colleges” as the conduct under investigation. CFPB v. ACICS, 854 F.3d 683 (D.C. Cir. 2017).

Now, a unanimous panel of the Fifth Circuit has followed suit and held that a CID issued to the Source for Public Data, “a company that provides public records to the public through an Internet-based search engine,” is invalid because it uses similarly broad language that does not comply with the statute.
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In a June 21, 2018 opinion, Judge Loretta Preska of the U.S. District Court for the Southern District of New York held that the structure of the Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) is unconstitutional. This ruling is inconsistent with the D.C. Circuit’s en banc decision in PHH Corp. v. CFPB (“PHH”).

The case, CFPB v. RD Legal Funding, LLC, involves joint claims brought by the Bureau and the New York State Office of the Attorney General. RD Legal offers cash advances to consumers waiting on payouts from settlement agreements or judgments entered in their favor. The claims allege that the company defrauded 9/11 first responders and NFL retirees by misleading them regarding cash advances that were represented as valid sales but instead were loans made in violation of state usury law.

RD Legal argued that the BCFP’s structure as an independent bureau within the Federal Reserve System violates Article II of the United States Constitution, as the Bureau’s Director can be removed only “for inefficiency, neglect of duty, or malfeasance in office.” In reviewing that claim, Judge Preska sided with one of the dissenting opinions in PHH. Specifically, she noted that she “disagrees with the holding of the en banc court and instead adopts Sections I-IV of Judge Brett Kavanaugh’s dissent…, where, based on considerations of history, liberty, and presidential authority, Judge Kavanaugh concluded that the CFPB ‘is unconstitutionally structured because it is an independent agency that exercises substantial executive power and is headed by a single director.’”
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