Join us on LinkedIn Follow us on Twitter Like us on Facebook
 
  OCTOBER RESEARCH STORE Already a subscriber? LOG IN
AddControlToContainer_DynamicNavigation6

Former CFPB officials give insight on bureau’s SEFL actions

Add This Email A Friend Printer Friendly Version Increase Text Size Decrease Text Size
0 comments
Consumer Protection, Dodd-Frank Basics
Friday, November 20, 2020
Anthony Alexis, former assistant director and head of enforcement of the Consumer Financial Protection Bureau (CFPB), and Ori Lev, former deputy director of enforcement, engaged in a virtual forum with Dan Smith, Consumer Bankers Association executive vice president and head of regulatory affairs.

The trio discussed the current state of the CFPB’s supervisory, enforcement, and fair lending division.

“We’ve had lots of yin and yang at the bureau for the last year and a half,” Smith said. “We had a pretty stable understanding of how things operated at the bureau under Director [Richard] Cordray; Mick Mulvaney came in and made some significant changes. Director [Kathy] Kraninger now has sort of stabilized it. What should banks be thinking about for the rest of the year, and the next couple years under Kraninger?”

Alexis discussed the number of exams currently underway at the bureau. “[C]urrently there are a robust number of examinations going on, and I would say obviously the institutions being examined fall within the jurisdiction of the CFPB, so they are large banks. In addition, new companies, and banks, as they mature into the CFPB’s jurisdiction, they’re being examined.”

Alexis said it appeared the bureau’s enforcement team is working, and working hard. He said he had noticed lawsuits could be placed into two categories: bank and nonbank. Lawsuits against banks included account-opening matters, FDCPA-related (fair debt collection practices act) issues, and a myriad of other things. Actions against nonbanks appeared to be primarily related to telemarketer sales rules (TSR) investigations and lawsuits, and Mortgage Acts and Practices (MAP) rule investigations, suits, and settlements.

“You look back at some of the lawsuits that have been filed and you would say, well, some of the timing and the age of those lawsuits mean those investigations were legacy investigations that go back to Kraninger’s prior director,” Alexis said.

“I think the bureau has currently hit its stride,” he continued. “I don’t know – with the exception of the CIDs [civil investigative demands] that I have – what type of investigation it may have against banks, but certainly against the nonbanks, they’re present.”

Smith asked if Alexis thought there was a better balance between bank and nonbank actions under Kraninger than past directors. Alexis said it was difficult to say.

“One of the critical issues is, what is the view of the institution in terms of wanting to do battle with the CFPB?” Alexis asked. “In some cases, some institutions want certainty. They want to change their behavior; they want to understand what the regulator says the rules of the road are. They want to adjust their products to be consistent with the rules of the road, and their compliance systems, and move on. Uncertainty is not good for them.”

Alexis said nonbank entities could be more likely to fight the CFPB and those rules and regulations that would cause a loss of profit. He said those burdens could cause the entities enough stress that, to them, it would be worth filing a suit or challenging the investigation. He said, because of this, it is likely there’s a tilt toward nonbanks being investigated.

“Given the privacy that the CFPB affords while things are being investigated or examined, you don’t know what is being examined, and you don’t know what’s being investigated unless you’re participating with the investigation,” he said. “But you will know when things go to the bureau for the purposes of challenging a CID, or go to court in order to enforce a CID, or go to court because you have to file suit against the player.”

Lev said he agreed with Alexis’ points about the legacy investigations and his comment about the TSR and MAP rule investigations.

“I find the Kraninger CFPB somewhat enigmatic,” Lev said. “On the one hand, it’s a dramatic change from Cordray. On the other hand, there’s a lot of business as usual. The change on the enforcement front is really in the numbers.”

Lev then highlighted the difference in the number of public enforcement actions between the two directors. Under Cordray, there were approximately 40 actions brought each of his last two years in office, compared with Kraninger’s rate, which was around 30 actions each in the last two years.

“I filed a FOIA [freedom of information act] request with the bureau two years ago and got the response a week ago about the number of investigations they’re opening each fiscal year, and it was striking,” he said.

According to Lev, his request showed in the last four fiscal years under Cordray, the bureau opened 99, 45, 70, and 63 new investigations. Mulvaney opened 15 in his year as director, and Kraninger opened 20.

“That’s a precipitous drop, and that pipeline, it takes a couple years for those investigations to mature into the public actions we know about,” he explained. “We private practitioners get little slices from the matters we’re working on from talking to other folks, but the numbers suggest we’re going to see a tail in a couple years with fewer enforcement actions, even under a Biden administration. It’s going to take time for things to ramp up.”

Lev also pointed out that CMP (civil money penalties) and restitution have been different under Kraninger, and fair lending enforcement has been “all but non-existent.” On the other hand, he said, in his view, with respect to substantive enforcement claims, things remain largely the same and are inconsistent with the “rhetoric you hear from the ‘new’ bureau.”

“They have continued a lot of the matters that were either opened as investigations under Rich Cordray, or brought as lawsuits under Rich Cordray,” he said. “It would be really interesting for me to know whether Kathy Kraninger would have signed off on these cases, on these investigations, in the first instance.

“It’s much easier to not open something than it is to kill a public action,” he continued. “Mulvaney dismissed a lawsuit against a payday lender and there was a big brouhaha in the press about that, but that was frankly aberrational. They’ve continued to litigate against a case against the National Collegiate Student Loan Trust, which is a securitization trust, even after a district court said the consent order the bureau filed wasn’t entered into by the people authorized for the trust. It was a perfect opportunity to walk away. Nope, they doubled down on that.

“There’s a lot of what they’re doing that is consistent with the old CFPB, and I think it’s too soon to tell whether that’s just a matter of legacy investigations, or if that’s a matter of the career staff driving things, or a matter of Kathy Kraninger being more in the middle of the road than some of the rhetoric suggests.”

The trio also discussed prioritized assessments, a new development for the bureau.

Lev said he was not surprised by this response from the bureau, and prior directors would likely have done the same.

“To me, [prioritized assessments] seem to be a reasonable, regulatory reaction to the situation, and a moderate one for the bureau to say, ‘look, this is a new world, and with all these changes, we want to know what’s going on,’” he said. “Kraninger’s got this big emphasis on prevention of harm, which should be driving things toward the supervision side of the house, as opposed to enforcement, and [prioritized assessments] appear to target exactly that.”
Today's other top stories
CBA’s wishlist for Biden’s CFPB
NPR on delaying QM rule compliance date issued
NCUA’s Harper: FIRE philosophy to be ‘North Star’ for agency
FHFA authorizes record amount for affordable housing
UWM, Rocket Mortgage tension hits breaking point


COMMENT BOX DISCLAIMER:
October Research is not responsible for the comments posted on its websites by readers. We will do our best to remove comments that include profanity or personal attacks or other inappropriate comments.
Comments:

Be the first to leave a comment.

Leave your comment
CAPTCHA Validation
CAPTCHA
Code:
: 
: 
Your Email is for reporting purposes only. It will NOT be displayed.
Popularity:
This article has been viewed 2664 times.

Monthly Newsletter

Dodd Frank Update March 2021

Cover Story:

CFPB releases supervisory highlights on prioritized assessments


Tweets from @DoddFrankUpdate/lists/industry-news
News by Topic   News by Edition   News by Agency   News by Industry   Special Reports   Webinars
Banking
Case Law
Consumer Protection
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
 
Dodd Frank Update December 2020
Dodd Frank Update January 2021
Dodd Frank Update February 2021
Dodd Frank Update March 2021
Archives
 
CFPB NCUA
CFTC OCC
FDIC OFR
FHFA SEC
FRB States
FSOC Treasury
FTC  
 
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Investment Adviser
Land Title
Mortgage
Mining and Manufacturing
Payday Lending
 
State of the Industry
Mortgage Technoloy
New Rules of Compliance
CFPB Anniversary
The New GSE Focus
Archives
 
Getting to Know Your Regulators
RESPA Section 9
Economic Forecast - Q1
Streamlining the HMDA Process
Archives

Library   About   Subscribe   Store
The Dodd-Frank Act Position Papers
Dodd-Frank Summary & History Legislation
Court Actions Regulations
Enforcement Documents Reports, Studies and Surveys
Guidance Documents Federal Register Notices
White Papers  
 
Dodd Frank Update
Contact / Editors
Advertise
Social Media
Are You An Expert?
Subscriber Agreement
 
Subscriptions
Free Email Updates
Try a Free Edition
 
NS3 The Summit
Other Newsletters
The Title Report
The Legal Description
Valuation Review
RESPA News
Copyright © 2011-2021 Dodd Frank Update
An October Research, LLC publication
3046 Brecksville Road, Suite D, Richfield, OH 44286
(330) 659-6101, All Rights Reserved
www.doddfrankupdate.com | Privacy Policy
VISIT OUR OTHER WEBSITES
> The Legal Description
> RESPA News
> The Title Report
> Valuation Review
> The October Store


Loading... Loading...
Featuring:
  • Delivery 3X a week plus breaking news as it happens
  • Comprehensive title insurance industry news
  • Recent acquisitions, mergers, real estate stats
  • Exclusive in-depth coverage of the industry's hottest stories
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Comprehensive Dodd-Frank coverage
  • The latest information from the CFPB
  • Full coverage of Congressional hearings
  • Updates on all agency actions
  • Analysis of controversial provisions
  • Release of newest studies and reports
Sign up today and...
  • Be one of the first to know where NS3 is being held
  • Learn about NS3 speakers and sessions
  • Save on registration with Super-Early Bird rates
  • Discover the networking opportunities NS3 offers
  • Find out if CE credits will be offered for your area
  • And much more
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Preview the latest RESPAnews.com Top Story
  • RESPA related headline news
  • Quote of the Week
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • Legal, regulatory and legislative information impacting the settlement services industry
  • News from HUD, Congress, state legislatures and other regulatory agencies
  • Follow the lobbying efforts of all the major national real estate services organizations.
Featuring:
  • Delivery 2X a week plus breaking news as it happens
  • The industry's only full-time newsroom
  • Relevant, up-to-date appraisal industry news
  • Covering the hottest stories and industry trends
NEWS BY TOPIC
EDITION
AGENCY
INDUSTRY
SPECIAL REPORTS
LIBRARY
WEBINARS
EMAIL UPDATES
ABOUT
SUBSCRIBE
Banking
Case Law
Consumer Protection
Financial Stability
Industry Spotlight
Legislation
Nonbank Financial
The TRID Journey
CFPB
CFTC
FDIC
FHFA
FRB
FSOC
NCUA
OCC
OFR
SEC
States
Treasury
Appraisal
Broker-Dealer
Community Banks & Credit Unions
Investment Adviser
Land Title
Mortgage
Mining and Manufacturing
Payday Lending
2021 State of the Industry
2020 Mortgage Technology
New Rules of Compliance
2020 CFPB Anniversary Report
The New GSE Focus
Archives
The Dodd-Frank Act
Dodd-Frank Summary
Court Actions
Enforcement Documents
Guidance Documents
White Papers
Position Papers
Legislation
Regulations
Reports, Studies and Surveys
Federal Register Notices
Proposals
Final Rules
GAO
Agency
RESPA Section 9
Economic Forecast Series - Q1
Getting to Know Your Regulators
Streamlining the HMDA process
Webinar Archives
Contact Us
Advertise
Social Media
Are You An Expert?
Subscriber Agreement