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AFSA Responds to Comments on CFPB’s Streamlining Initiative
On June 4, AFSA submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to comments the Bureau received on streamlining regulations it recently inherited from other federal agencies. AFSA’s comments emphasized that the CFPB should: (1) continue to allow consumers to take advantage of deferred interest financing plan; (2) permit issuers to provide disclosures electronically, without regard to the requirements of the Electronic Signatures in Global and National Commerce Act (E-Sign Act); (3) keep the current definition of “consumer”; and (4) permit consumers to rely on household income to obtain credit. Lastly, AFSA advocated that the CFPB should not require mortgage lenders to pay all closing costs as overhead.
AFSA Letter to Chairman Issa Addresses Regulatory Burden
AFSA sent a letter on May 16 to Rep. Darrell Issa (R-CA), Chairman of the House Committee on Oversight and Government Reform, in response to his request for the association to identify existing and proposed regulations that negatively impact jobs and the economy. AFSA's comments addressed two broad policy concerns. First, the letter discussed regulations affecting the financial services sector, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; the Credit Card Accountability, Responsibility, and Disclosure Act; and the Consumer Financial Protection Bureau's (CFPB) mortgage rules. AFSA also addressed the extraordinary authority the CFPB has. Second, the letter discussed the need for systemic reform of the regulatory process.
AFSA Webinar to Address Event Measurement Marketing
An upcoming webinar hosted by AFSA’s Marketing Committee will address marketing campaign success measurement and provide practical insights on improving data management. On June 27 at 1:00 pm Eastern Time, Rob Arndt, president of D2K Corp., will discuss campaign targeting and segmentation, analytics, segmentation testing, and metrics used for reporting response. The presentation will include a case study of a consumer finance company. The cost of the 60-minute webinar is $25 for AFSA members and $50 for non-members. Register now
CFPB Posts New Rules on Enforcement of Consumer Financial LawReverse Mortgage Daily (06/06/12) Ecker, Elizabeth
The Consumer Financial Protection Bureau (CFPB) posted three final rules and one interim rule on June 6 relating to how they will investigate and enforce federal consumer financial law. Initially published as interim rules in July 2011, the rules outline the ways in which the Bureau will conduct investigations and hearings, receive information about state-level legal developments, and implement the Equal Access to Justice Act. “These rules allow the agency to stay abreast of developments in consumer financial law, investigate possible violations of these laws, and bring actions to enforce these laws, helping us better serve our mission of protecting American consumers,” CFPB Deputy Enforcement Director for Litigation Ori Lev wrote on the Bureau’s website.
Senators Ask Federal Officials to Look Into Companies Offering Products to VeteransThe Hill (06/06/12) Needham, Vicki
U.S. senator Patty Murray (D-WA.), chairman of the Senate Veterans’ Affairs Committee, and senators Herb Kohl (D-WI), Jon Tester (D-MT) and Ron Wyden (D-OR) wrote a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray on June 6 asking the Bureau and its Office for Older Americans and Office of Servicemember Affairs to investigate and take action against companies marketing unsuitable and costly financial products and services to older veterans.
In the letter, the senators expressed concern about the adverse impact of these products on veterans’ eligibility for VA and other federal benefits, such as long-term care. They voiced concerns about practices such as companies granting veterans deferred payments on assisted living costs for either a certain time period or until receipt of VA pension benefits, which can negatively affect a veteran’s eligibility for pension benefits. "Some of these companies fail to offer accurate advice on other available benefits, often to the detriment of the veteran or survivor," they added. The senators would like more education provided to veterans and their families about these practices and their VA benefits.
Regulators Move to Coordinate Supervision of Banks, Credit UnionsAmerican Banker (06/04/12) Borak, Donna
The Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Administration, and the Office of the Comptroller of the Currency issued guidance on June 4 outlining their plans to coordinate supervision of banks and credit unions with more than $10 billion in assets. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) requires the agencies to collaborate on scheduling exams, conducting simultaneous examinations, and sharing draft reports of the examination for comment. Dodd-Frank also grants exclusive authority to the CFPB to require reports and conduct periodic examinations to ensure compliance with federal consumer financial laws, gather information about activities subject to those laws, and identify potential risks to consumers. "These coordination undertakings should lead to greater uniformity and efficiencies in supervision and help to minimize regulatory burden on covered depository institutions," the agencies said in a joint press release.
State Senate Backs Tough Anti-Foreclosure MeasureThe Boston Herald (06/06/12) Kronenberg, Jerry
On June 6, the Massachusetts Senate approved House Bill 4096, legislation supported by Attorney General Martha Coakley that prohibits lenders from foreclosing on a mortgage unless they demonstrate that foreclosure will cost less than modifying the homeowner’s mortgage. The Senate version includes an amendment requiring mandatory pre-foreclosure mediation, which proponents say will force banks to consider all reasonable alternatives to seizing homes. Industry has opposed the amendment, stating that mandatory mediation adds extra time and costs to the foreclosure process. The bill will now go to conference committee before going to Governor Deval Patrick for his signature.
NMLS Says Most Licensed Companies are Small, Local - Average is 5.8 LO'sMortgage News Daily (06/06/12) Swanson, Jann
In the first quarter of 2012, the number of mortgage entities state-licensed and registered through the National Mortgage Licensing System (NMLS) continued to rise. At the end of the first quarter, 15,883 companies and 105,595 individuals held state licenses. The number of companies and mortgage loan originators (MLOs) licensed through the system increased six percent and 5.5 percent, respectively, between the end of the first quarter of 2011 and 2012. The majority of companies licensed were small businesses and only two percent were owned by depository institutions.
According to the NMLS report, the increase in the number of companies, mortgagees, and MLOs licensed through the system was due mainly to more state agencies transitioning into the system. NMLS also said that the high activity in the first quarters of 2011 resulted from companies coming into compliance with state laws, making year-over-year comparisons this year less stable.
Fitch: April Marks ‘Stellar’ Month for U.S. Auto ABSSubPrime Auto Finance News (06/06/12)
U.S. auto loan asset-backed securities (ABS) performance in April was "stellar," according to Fitch Ratings. Prime auto ABS delinquencies and losses dropped to the lowest levels of the year in April. Analysts said performance was strengthened by solid 2009-2011 vintages, which to date have recorded record low loss rates. "April is typically the strongest month of the year thanks in part to tax refunds. These combined factors drove performance in April, as prime annualized net losses (ANL) hit a new record low," analysts added.
Obama Highlighting Student Loan Repayment OptionAssociated Press (06/06/12) Armario, Christine
As Congress debates how to avoid doubling interest rates on new federal student loans on July 1 due to the expiration of a 2007 law, the White House announced a plan to help Americans better manage their federal student loan debt. President Obama’s plan calls for the Internal Revenue Service and Education and Treasury Departments to streamline the application process for enrolling in income-based repayment plans, which set loan payments according to discretionary income. Under the plan, federal student loan borrowers simultaneously will be able to apply for the income-based repayment plan and submit supporting data from their IRS tax return. Currently, only about 700,000 people participate in income-based repayment plans, although the administration believes many more students qualify. The Education Department will be tasked with creating online and mobile resources to educate students about federal aid and payment plans, as well as instructing servicers to inform students before graduation about the options to participate in an income-based repayment plan.
AFSA Newsbriefs is a weekly executive summary of AFSA initiatives and consumer credit articles. AFSA Newsbriefs is free for members. Send an email to [email protected] to subscribe.
AFSA's mission is to protect and improve the consumer credit business, maintain a positive public image, and create a legislative climate in which reasonable credit regulation can and will be enacted. The association operates in the public interest, encourages and maintains ethical business practices, supports financial education for consumers of all ages, and provides other assistance in related fields on an as-needed basis.
The American Financial Services Association has provided services to its members for over ninety years. The association's officers, board, and staff are dedicated to continuing this impressive legacy of commitment through the addition of new members and programs, and increasing the quality of existing services.