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Spring 2015 rulemaking agenda

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As a 21st century agency created by the Dodd-Frank Act, we’re here to make consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.

An important part of our mandate is to make rules more effective and create new rules when necessary. Today, we’re posting a semi-annual update of our rulemaking agenda as part of the federal government’s Unified Agenda of Regulatory and Deregulatory Actions.

Under the Regulatory Flexibility Act, federal agencies must publish regulatory agendas twice a year. We’ve been voluntarily participating in the Unified Agenda. The Office of Management and Budget leads this effort. The Unified Agenda is available in full online, and portions will also be published in the Federal Register. The agenda includes rulemaking actions in pre-rule, proposed rule, final rule, long-term, and completed stages.

Here’s an overview of our major initiatives.

Updates to the Home Mortgage Disclosure Act (HMDA)

We’re working to finalize a proposed rule we published in August 2014 to implement Dodd-Frank Act amendments to the Home Mortgage Disclosure Act (HMDA). The proposal would help align the law with existing industry standards for collecting data on mortgage loans and applications. It would also improve HMDA’s effectiveness through changes to institutional and transactional coverage, modifications of reporting requirements, and clarifications of existing regulatory provisions. We expect to release a final rule in late summer.

Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures

We also continue to focus intensely on supporting efforts to implement a rule, required by Dodd-Frank, that consolidates and streamlines federal mortgage disclosures required under TILA and RESPA. In February 2015, we issued a small follow-up rule to provide technical corrections, address the provision of language relating to new construction loans on the Loan Estimate form, and relax certain timing requirements regarding revised disclosures. We’ve provided guides and materials to help industry and consumers prepare for the changes. The rule will take effect on August 1, 2015.

Follow-up on other mortgage rules

We’re also continuing to work with stakeholders to address questions about rules we released in January 2013 to implement various Dodd-Frank Act mortgage reforms. Among other efforts, we’re issuing clarifications and amendments as warranted. For example, we’re working to finalize a proposal we published in February 2015 to modify certain requirements for small creditors, including those that operate predominantly in “rural or underserved” areas. We expect to issue a final rule in fall 2015.

We also published a larger proposal in December 2014 to amend certain aspects of the 2013 mortgage servicing rules. The proposed rule would affect disclosures, early intervention, and loss mitigation. The proposal also addresses compliance with the rules when a consumer is a potential or confirmed successor in interest, is in bankruptcy, or sends a cease communication request under the Fair Debt Collection Practices Act (FDCPA). We expect to issue a final rule in spring 2016.

Prepaid financial products

We’re finalizing a proposal we published in December 2014 that would create comprehensive consumer protections for a range of prepaid financial products, including general-purpose reloadable prepaid cards and certain digital and mobile wallets. Under the proposal, prepaid accounts would receive certain protections that are similar to those that exist now for debit and payroll cards. The protections relate to, among other things:

  • Error resolution
  • Limitations on liability when a card is lost or stolen
  • The provision of information about account activity.

We also proposed general credit card protections to prepaid products that access overdraft services or offer credit features for a fee. Under the proposal, these products would be treated generally as credit cards under TILA and Regulation Z. The proposal would include:

  • Requirements that creditors assess consumers’ ability to repay before extending them credit
  • Fee limitations in the first year of account opening
  • Certain rules regarding payment periods and processing
  • Specific disclosures before a consumer acquires a prepaid account.

We expect to issue a final rule in early 2016.

Payday, auto title, and certain other loans

We recently released an outline of proposals we’re considering in connection with regulating payday loans, auto-title loans, and certain other longer-term credit products. We consulted with a panel of small lenders, under the Small Business Regulatory Enforcement Fairness Act, who may be affected by the rulemaking. We’ve also published research on payday lending and so-called deposit advance products, including an April 2013 white paper and a March 2014 data point. We plan to issue a Notice of Proposed Rulemaking later this year after completing additional outreach and analysis.

Overdrafts

We’re continuing to analyze issues relating to overdraft services on checking accounts. Our analysis builds on a June 2013 white paper and a July 2014 report . We’re conducting additional research and assessing whether rulemaking is warranted.

Larger participants

We continue to issue rules implementing our supervisory program for certain nonbank entities by defining “larger participants” in various markets for consumer financial products and services. We expect to finalize a proposal early this summer to define “larger participants” in the market for auto lending. This will build on previous rules defining larger participants in the markets for debt collection, credit reporting, student loan servicing, and international money transfers.

Debt collection

We are developing proposed rules concerning debt collection. Last year, we received more than 23,000 comments in response to an Advanced Notice of Proposed Rulemaking. In developing our proposal, we’re surveying consumers about their experiences with debt collectors. We’re also engaged in consumer testing initiatives to determine what information would be useful for consumers to have about debt collection and their debts, and to determine how that information should be provided to them.

Arbitration

We’re following up on research we conducted under the Dodd-Frank Act concerning the use of arbitration agreements involving consumer financial products or services. We issued a preliminary report in December 2013 and a report to Congress in March 2015. We’re now evaluating feedback we received and considering whether rules governing arbitration clauses may be warranted.

We’re continuing research, analysis, and outreach on a number of other consumer financial services markets, and we’ll update our next semi-annual agenda in the fall.

Here’s why childhood is an important time to learn about money

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Last summer, we learned that U.S. teenagers are in the middle of the pack when it comes to financial literacy, compared to other nations. Preparing young people for a solid financial future is an important job. And much work remains.

Some recent research looks at how young people build financial skills, habits, and attitudes. The research also emphasizes how parents can model and teach helpful financial habits to their children at an early age.

If you have kids, it might surprise you to know that children as young as five years old can be ready to learn about saving and spending. From early childhood to young adulthood, you can build the foundation to enable them to manage their finances as adults.

Here are some key takeaways from researchers that you can put into practice:

Children as young as five can learn about saving

Research suggests that children are “developmentally capable” of saving by age five. A piggy bank or savings account gives them a hands-on way to build a savings mindset. And parents take note: your child may acquire a taste for financial planning that lasts well into adulthood. The same research shows that children who grew up with a savings account were more likely to hold “diverse asset portfolios and to accumulate more savings as young adults.” That’s a powerful piggy bank!

An allowance isn’t just about money, it’s about guiding your child

Access to money from gifts or from a steady allowance, by itself, may not help your child build habits he or she will need as an adult. Research observed that giving an allowance on its own was an ineffective way to build a child’s financial skills—the benefits came when the child also got guidance on saving and budgeting along with the allowance. According to the research, “parental oversight as to how the money is spent, and parental teaching about budgeting and the necessity of saving, was found to be most effective.” So when you provide opportunities for saving and spending, talk to your children about their decisions.

Young people learn from hands-on experiences

Teenagers can practice financial skills and decision-making. As they manage their first paychecks, and the spending and saving choices that go along with them, parents are still a sounding board. Listening and providing guidance to your teenager can provide a safety net, so that he or she can learn from experiences and mistakes (let’s be honest, there are bound to be a few).

Young adults learn financial skills more and benefit when they have opportunities to make their own financial decisions, while still receiving guidance and feedback. For example, a program that included connecting economically disadvantaged youth to a job and savings account, and providing just-in-time financial education, showed promising results. Youth experienced “both an increase in knowledge and an increase in the application of that knowledge.”

For more ideas on teaching your kids about money, check out our resources for parents.

We are also working to help schools or communities provide youth with more access to hands-on learning around financial education. If this interests you, feel free to share our K-12 financial education guide with your local school. Financial educators can also check out the resources available as they serve the community.

The launch of the CFPB financial coaching initiative

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Today, we launched our financial coaching initiative. The launch featured remarks from Director Richard Cordray and Secretary of Labor Thomas Perez, as well as other key program participants.

The live event has now ended, but we’ll have a recording available here soon.

Our financial coaching initiative

Whether you’re a veteran who has recently transitioned to life in the civilian world, or a consumer facing economic challenges, having a trusted, well-informed advisor can increase your odds of success. Our financial coaching initiative will provide guidance to recently-transitioned veterans and vulnerable families in places where they’re already going for help. We’ve joined forces with the DOL and more than two dozen non-profit social-services providers to place 60 certified coaches in DOL American Job Centers and community-centered non-profits across the country. These professionals will provide one-on-one free coaching to help these consumers craft a personalized plan for financial success.

You can download a printer friendly list of financial coaching delivery sites.

Updated on May 26, 2015 to include the financial coaching delivery sites.

Consumer advisory: Fact-check your specialty consumer report

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You probably already know that when you apply for a loan, many lenders will get information about your credit history from one of the big three consumer reporting agencies (Equifax, Experian and TransUnion). This information can determine whether you are eligible for a loan and how much the loan will cost.

But did you know that there are other consumer reporting agencies that also collect and sell your personal data? Some of these companies, called specialty consumer reporting agencies, compile and sell reports with all kinds of personal data including, but not limited to, the history of your employment, rental, banking, lending, insurance, and criminal background. This includes other public record data such as tax liens, civil suits and bankruptcy data.

We’ve got a list of consumer reporting agencies, so you can fact-check them to ensure your personal report data is accurate and complete.

Why you should know what’s in your reports

If you’re applying for a job, planning to rent an apartment, or purchasing property or health insurance, you might want to check and see if one of these specialty consumer reporting agencies has a file with your information. It may also be useful if you’re applying for a checking account, or had problems with utility bills. For example, if you are applying for a lease, one of your “tenant screening” specialty reports might be reviewed by the landlord. Keep in mind that not every consumer reporting agency will have information on every consumer.

Check reports in advance

When it comes to your personal data, all consumer reporting agencies are required to follow reasonable procedures to ensure that the information in your report is accurate, but errors can happen. You should fact-check your report in advance, allowing sufficient time for companies to investigate and fix errors. Once you notify a consumer reporting agency of a potential error on your report, the agency generally has thirty days to investigate and fix the errors on your report. After completing the investigation, they generally have five business days to notify you of its results.

The last thing you want is an unpleasant surprise that may disqualify you from a loan, job or a new lease. You’re in the best position to know whether the information in your personal reports is accurate and complete.

How to request and dispute a report

Here’s a list of consumer reporting agencies, complete with the contact information, (including the phone numbers and websites), for nearly fifty companies. By law, consumer reporting agencies must provide you a copy of your report upon request. Most of the companies in this list provide reports for free once every twelve months (as indicated on the list) though others may charge you a small fee. If you spot any errors, you have the right to dispute the report’s content with the consumer reporting agency and the company that provided the data. The companies are required to investigate your dispute for free.

Check out Ask CFPB for more information about specialty consumer reporting agencies. You can also download a printer-friendly version of this information to share with friends or clients. If you have a problem with credit reporting or any other financial product, you can submit a complaint to us online.

Live from Milwaukee!

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Today, we held a field hearing on student debt in Milwaukee. The hearing featured remarks from Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public.

The live event has now ended, but we’ll have a recording available here soon.

You can keep the conversation going on social media with #StudentDebtStress and tell us about your student debt stress.

Tell us about your student debt stress

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If you are paying back student loans, you are not alone. Over 40 million Americans are repaying more than $1.2 trillion in outstanding student loan debt. Significant debt can have a domino effect on the major choices you make in your life: whether to take a particular job, whether to move, whether to buy a home, even whether to get married. For many of you, student debt stress makes these big milestones seem out of reach.

We’ve heard that some student loan servicers (the company that sends you a bill each month) may be adding to that stress. We’re seeking information from the public about the student loan servicing practices that may make it harder to get ahead of your debt.

We want to hear from you about your experience with your student loan servicer. If you’ve run into roadblocks, tell us about it – for example, we want to know if you’ve had payment processing problems, servicing transfer snags, communication confusion, or any other challenges when repaying your student debt.

Simply click this link to send us an email, which will be included in the public record. Please don’t include sensitive information like account numbers and social security numbers. We’re accepting comments through July 13.

In the infographic below, you can learn more about roadblocks some borrowers have encountered when dealing with their student loan servicers.

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We’re also calling on other stakeholders, including financial institutions, colleges, consumer advocates and policy experts to share their feedback. A full list of questions we’re asking the public are available in our Request for Information.

In the next few weeks, we encourage you to check back for more information about our work to strengthen student loan servicing and to hear the experiences of others with student debt. Be sure to tell others about the chance to include their stories in the public record. Spread the word to friends and family with student debt stress using  #StudentDebtStress on social media, but remember you must click this link to email an official comment.

If you have questions about repaying your student loans, check out our Repay Student Debt feature of Paying for College to find out how you can tackle your student loan debt.

If you have a problem with your student loan, you can submit a complaint online or call us at (855) 411-2372.

Having trouble with a link in this blog post? Check out the Request for Information for more information on how to submit an official comment.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.