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The 2015 annual report from the CFPB Ombudsman’s Office

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Today, I want to share with you the CFPB Ombudsman’s annual report, which I delivered to Director Cordray. The CFPB Ombudsman’s Office is an independent, impartial, and confidential resource that assists consumers and companies in informally resolving issues with the CFPB. This report summarizes our activities in fiscal year 2015.

The report includes a description of how our office works in practice with a new flowchart of when to contact us and what to expect when you do, an analysis of the inquiries we received in fiscal year 2015, and a recap of our first Ombudsman Forum.

Additionally, you’ll find discussion and our accompanying feedback or recommendations on three topics:

  • CFPB field hearings,
  • Language used in CFPB consent orders and their corresponding press releases, and
  • Defining company response options in conjunction with the CFPB’s public Consumer Complaint Database.

More information about our resource is available on our webpage, including the various ways to reach us. We welcome you to connect with us on topics that we have shared in our report, ask questions about our role, or discuss CFPB process matters at CFPBOmbudsman@cfpb.gov or (855) 830-7880.

Wendy Kamenshine is the Ombudsman for the Consumer Financial Protection Bureau.

Fall 2015 rulemaking agenda

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An important part of the CFPB’s mandate from Congress is to make rules governing consumer finance markets more effective and to create new rules when warranted. Today, we’re posting a semiannual 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 current and long-term initiatives.

Current initiatives

Arbitration

Arbitration clauses in many contracts for consumer financial products and services require consumers and financial institutions to resolve any disputes that may arise between them through a private arbitration process, instead of going to court. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) banned such arbitration clauses in contracts for mortgage loans and directed the Bureau to study the use of agreements providing for arbitration in connection with consumer financial products or services. This past March, we sent Congress the report summarizing our three-year study, which was the most comprehensive analysis of consumer finance arbitration ever performed and expanded on preliminary results that we had released in December 2013.

We’re now beginning a rulemaking process to address concerns related to the use of arbitration agreements in connection with credit cards, deposit accounts, payday loans and various other consumer financial products or services. In particular, we are considering whether to propose rules that would prevent companies from using these agreements to foreclose consumers’ ability to bring class action lawsuits, which can provide consumers with substantial relief and create the leverage to bring about changes in business practices. To help monitor the fairness of arbitration proceedings, we are also considering whether to propose requiring that arbitration filings and awards be submitted to the Bureau. These ideas are summarized in an outline that we recently released for purposes of consulting with representatives of small businesses that might be affected by the rulemaking, using a process outlined in the Small Business Regulatory Enforcement Fairness Act.

Payday, auto title, and similar lending products

The Bureau is in the process of developing a Notice of Proposed Rulemaking to address concerns in markets for payday, auto title, and similar lending products. The Bureau is particularly concerned that lenders are offering these products without assessing the consumer’s ability to repay, thereby forcing consumers to choose between reborrowing, defaulting, or falling behind on other obligations. We are also concerned about certain payment collection practices that can subject consumers to substantial fees and increase risk of account closure.

The Notice of Proposed Rulemaking will build on feedback we have received from small businesses and other stakeholders after releasing an outline of proposals under consideration last spring for purposes of the Small Business Regulatory Enforcement Fairness Act process. The Bureau will also publish results of further research it has been conducting into these markets in connection with the rulemaking proposal. The Bureau previously released a white paper and a report summarizing some of its research on some of these products. We expect to release the rulemaking proposal in first quarter 2016.

Prepaid accounts

General purpose reloadable cards and other similar prepaid products are increasingly being used by consumers in place of traditional checking accounts or credit cards, but they do not always carry important consumer protections. To address this issue, we’re finalizing a proposed rule that we published in the Federal Register in December 2014. We proposed that prepaid accounts receive certain protections that are similar to those that exist now for debit and payroll cards. We also proposed general credit card protections to prepaid accounts that access overdraft services or offer certain credit features. We expect to issue the final rule in spring 2016.

Overdraft

The Bureau is preparing for a rulemaking concerning overdraft programs on checking accounts. A prior white paper and report by the Bureau highlighted a number of possible consumer protection concerns, including how consumers consent (or “opt in”) to overdraft coverage for certain electronic transactions, overdraft coverage limits, transaction posting order practices, overdraft and insufficient funds fee structures, and involuntary account closures. Regulations that took effect in 2010 require that consumers opt in before banks can charge overdraft fees for ATM and one-time debit card transactions, but opt in rates vary widely. In preparation for the rulemaking, the Bureau is conducting additional research and has begun consumer testing initiatives related to the opt in process.

Debt collection

The Bureau is also conducting research for a rulemaking on debt collection activities, which are the single largest source of complaints to the federal government of any industry. Building on a previous Advance Notice of Proposed Rulemaking, the Bureau is now analyzing the results of a groundbreaking nationwide survey related to consumers’ experiences with debt collection. 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 how that information should be provided to them.

Larger participants and non-depository lender registration

The Dodd-Frank Act allows the Bureau to supervise nonbank financial services providers that are designated as “larger participants” in their particular markets for consumer financial products and services. We’ve already defined larger participants in several markets, including most recently the market for auto lending and leasing. The Bureau expects next to develop rules to define larger participants in markets for consumer installment loans and vehicle title loans. We also expect to consider whether rules to require registration of lenders in these markets or other non-depository lenders would facilitate the Bureau’s supervision of such entities.

Women-owned, minority-owned, and small businesses data collection

The Dodd-Frank Act requires the Bureau to develop rules to implement a requirement that financial institutions report information about lending to women-owned, minority-owned, and small businesses. The Bureau is beginning work on this project, building off a rule that it released this fall to revise a similar regime for reporting data about home mortgage lending. The first stage of our work will focus on outreach and research. We then plan to begin developing proposed rules concerning the data to be collected and appropriate procedures, information safeguards, and privacy protections for information-gathering.

Mortgage servicing

The Bureau is working to finalize a proposal we published in December 2014 to amend certain aspects of the Bureau’s 2013 mortgage servicing rules. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy. We have been conducting testing of periodic statements for consumers in bankruptcy and are working to develop the final rule for issuance in mid-2016.

Implementation of the Home Mortgage Disclosure Act, Know Before You Owe disclosures, and other mortgage rules

The Bureau is working to support implementation of multiple mortgage rules required by the Dodd-Frank Act. Most recently, in October 2015, we issued a final rule amending Regulation C to implement amendments to the Home Mortgage Disclosure Act made by the Dodd-Frank Act, among other things. The final rule adds new reporting requirements, clarifies several existing requirements, modifies the institutional and transactional coverage of Regulation C and the processes for reporting and disclosing data, and provides extensive compliance guidance. The Bureau is preparing a compliance guide and other support materials and programs to prepare for implementation of various parts of the rule starting in 2017 and 2018.

We are also continuing to support implementation of new rules that took effect in October 2015 requiring provision of Know Before You Owe disclosures to applicants for mortgage loans. The disclosure forms streamline and integrate information that lenders are required to provide consumers under the Truth in Lending Act and Real Estate Settlement Procedures Act. We’ve provided guides and materials to help industry and consumers prepare for the changes.

The Bureau is also continuing to support the implementation of various other mortgage-related final rules we issued in January 2013 to implement Dodd-Frank Act reforms and strengthen consumer protections involving mortgage origination and servicing. Among other efforts, we’re monitoring the market and continuing to issue clarifications and amendments as warranted. Most recently, we issued a final rule in September 2015 modifying certain requirements for small creditors that operate predominantly in “rural or underserved” areas.

Long-term actions

The Bureau has also updated a portion of the Unified Agenda focusing on long-term actions to reflect potential initiatives beyond November 2016. These include potential rulemakings to address important issues related to credit reporting and student loan servicing.

Credit reporting

Information in credit reports can be critical to determine a consumer’s eligibility for credit, access to checking accounts, employment, rental housing, and more. The Bureau is monitoring the market through its supervisory, enforcement, and research efforts, including a white paper we published in December 2012 and other agency reports on credit report accuracy. As this work continues, the Bureau will evaluate possible policy responses to issues identified, including potential additional rules or amendments to existing rules governing consumer reporting. Potential topics for consideration might include the accuracy of credit reports, including the processes for resolving consumer disputes, or other issues.

Student loan servicing

Student loan servicers are a critical link between borrowers and lenders, yet there are no consistent, market-wide federal standards for student loan servicing. In September 2015, we released a report that identifies issues and suggests a framework to improve student loan servicing. The Bureau has made it a priority to take action against companies that are engaging in illegal servicing practices , and that ongoing work includes addressing many of the problems outlined in this report. Also in September, the Bureau, the Department of Education, and the Department of the Treasury issued a Joint Statement of Principles on Student Loan Servicing , proposing a framework similar to the recommendations included in this report. We will continue to monitor the market for trends and developments and evaluate possible policy responses, including potentially proposing rules. Possible topics for consideration might include specific acts or practices and consumer disclosures.

The Bureau is continuing research, analysis, and outreach on a number of other consumer financial services markets, and we’ll update our next semiannual agenda in the spring.

We participated in the National Day of Civic Hacking 2015

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Coders, technology enthusiasts, economists, teachers, high school students, and entrepreneurs joined representatives from eight government agencies for the third annual National Day of Civic Hacking on June 6. During this collaborative event, a diverse group of citizens worked together to tackle complex problems facing our communities using technology and publicly released data.

We participated in multiple National Day of Civic Hacking events this year, with CFPB staff attending events in Washington D.C., Philadelphia, Oakland, Calif. and Burlington, Vt. During the event, participants provided input on our CFPB Owning a Home website and analyzed our public Consumer Complaint Database and our public Home Mortgage Disclosure Act (HMDA) Database.

Kimberly Munoz, a front-end web developer, participated in one of Oakland’s many events, contributing to the OpenOakland project. She also introduced participants with a data science background to the CFPB public Consumer Complaint Database in hopes of inspiring more grassroots use of the CFPB’s open data.

Catherine Farman, a front-end developer, attended Code for Philly’s event. Catherine is working on our Owning a Home project to convert a budgeting PDF to a web application that is flexible and is able to fit in any screen.

We hope to connect with other communities interested in engaging with our public databases. We believe there are opportunities for coders, developers, and others with strong technical prowess to build innovative tools and applications that can enable consumers to live better financial lives.

Got a cool data project to share? Just tweet at @cfpb with #CFPBdata. You can also follow us on GitHub.

You have the right to free, unbiased financial information

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CFPB - Four years working for you

If you are confused and lost when you are shopping for a mortgage or when you are figuring out how to pay for college, you are not alone. If you wish you had a financial expert to turn to for trustworthy guidance about paying off debts, or opening a credit card, you are not alone.

If you believe you have the right to free, unbiased financial information, you are not alone – because at the Consumer Financial Protection Bureau, we agree.

It’s our job to provide you with reliable, trustworthy information about the consumer financial marketplace. So, in the past four years we’ve worked hard creating online tools to inform your financial decisions that are truly free – no charges, no ads, no referral fees.

Three financial tools you can trust

Owning a Home helps you understand one of the most important financial decisions you’re likely to make: getting a mortgage. It explains the complex options you have when shopping for a mortgage loan, for example whether to consider a fixed rate or an adjustable rate. It lets you play around with different factors to see how they affect interest rates. You can also find an easy to use checklist for the closing process that will prepare you to sign on the dotted line.

Paying for College helps students, students-to-be, and their parents compare financial aid packages. For people paying off student loans, Repay Student Debt, a part of the tool, helps you understand your options for repayment, gives you resources to avoid missing payments, and offers helpful resources if you’ve defaulted on your loan. You’ll find a sample letter you can send to student loan servicers (the companies that send you a bill each month), and tips on how to communicate with debt collectors.

In Ask CFPB, you’ll find expert answers to more than 1,000 questions about financial products and services including student loans, credit cards, mortgages, credit scores, credit reporting, getting out of debt, and more. Over four million people have found reliable and unbiased answers to common questions, and we’re adding and improving questions all the time thanks to your feedback. You can rate each Ask CFPB question, letting us know if the answer was helpful, too long, incorrect or confusing. You can also submit questions you think would be good additions to the collection.

We will continue to add more features to our tools, create new tools for other major financial decisions, and make sure our resources stay up-to-date as we and other government agencies update rules. Try out our tools, send us your feedback, and share them with your friends.

When key financial decisions arise in your life, you are not alone. You can trust that our tools and resources will provide you with accurate, unbiased information so you can make the financial decisions you believe are best for you and your family.

You have the right to be heard

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CFPB - Four years working for you

For over four years, William was on the hook for over $8,000 worth of credit card debt he didn’t owe. His credit plummeted, debt collectors called him constantly, and when he tried to refinance his home, his application was denied. Then, he learned about the CFPB and submitted a complaint. Within a week, the debt collection attempts stopped.

“Just to have the situation resolved… that just felt good.” William said. “In a situation for me that was seemingly endless and hopeless, the CFPB helped me to find a resolution.”

We’ve handled more than 163,000 debt collection complaints. About one-third of these complaints, like William’s, were about attempts to collect on debt that the consumer asserted they didn’t owe. Since we began accepting complaints about debt collection, it’s been the most complained-about issue each month. That’s why we’re putting the spotlight on debt collection for our first monthly consumer complaint report. These monthly reports will provide a high-level snapshot of complaint trends and analysis, and we believe they can inform the public and anyone interested in the financial marketplace.

Listening to and elevating your voice matters to us because we are a federal agency devoted to protecting consumers. When you speak up, you offer invaluable insight into the financial products and services consumers depend on. Telling us about your experiences helps us to better serve you and make the financial marketplace work for Americans.

The CFPB was established in 2011, following the most severe financial crisis the US has faced since the Great Depression. In years since, we’ve made it a priority to listen to consumers and amplify their voices so that others could be inspired and empowered to take charge of their financial futures.

Over those years, I’ve had the pleasure of meeting the people we serve and have had an opportunity to hear about their experiences firsthand. As I’ve talked with people like William, I’ve seen the purpose and value in people sharing their stories, making their complaints heard, and adding to a larger and powerful conversation fueled by consumers who want to see a fairer financial marketplace.

William spoke up about his problem with debt collectors. But we’ve also heard from:

Many of these success stories started with a consumer submitting a complaint to us. If you have a problem with a financial product or service, tell us about your issue. We’ll forward your complaint to the company and work to get a response about your issue. Sometimes that response can mean fixing an error on a credit report, leaning about other student loan repayment options, or stopping debt collection calls.

Know that by coming to us you aren’t just helping yourself. Each week we send thousands of consumers’ complaints about financial products and services to companies for response. Those complaints are published in our public Consumer Complaint Database. What’s more, with your permission, we’ll publish your complaint alongside all the others we receive, joining your voice with other consumers facing similar challenges. By adding your voice to the more than 10,000 experiences in the database, you help improve the financial marketplace.

Since opening our doors four years ago, consumers like you have shared their experiences with us through more than 650,000 complaints. We’d love to hear from you, too. If you have an issue with a financial service or product, you can submit a complaint and opt to add your voice to the database.

You have the right to speak up. So join the conversation, because your story matters.

Four years working for you

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CFPB - Four years working for you
On July 21, the Consumer Financial Protection Bureau (CFPB) will turn four years old. While our doors have only been open for a short time, our work is helping to create a financial marketplace that works for you. We’re listening to your experiences through the complaints you submit, creating new consumer protections for financial products and services, holding bad actors accountable for breaking the rules, and developing useful tools and resources to empower you to make informed financial decisions.

The CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act as a direct result of the financial crisis in 2008. We were created to stand up for consumers and make sure everyone is treated fairly. To us, our work is about hearing the struggles you face in the financial marketplace and empowering you to make the best financial decisions. It’s also about rooting out bad actors or bad practices that cause harm or stand between you and your financial goals.

We hear stories like that of Ari, a servicemember, and his dad Harry who were dealing with predatory auto loans, and Venida who found an error on her credit report. They are not the only ones dealing with these problems. Their stories exemplify how you can make a difference in your financial situation.

We are here to protect consumers

Your complaints and stories play an important part in our work. As of this month, we’ve handled more than 650,000 of your complaints. When you submit your complaints and tell us your stories, it helps us spot problems and risks, and work to ensure a fair financial marketplace.

The mortgage servicing rules we enacted have brought more transparency to the home-owning process, keeping your mortgage servicers from giving you runarounds or losing your documents. For those who send money out of the country, we have created rules that make sure you know how much money will actually reach your intended recipient.

We’ve also held bad actors accountable in the marketplace, securing $10.8 billion in relief to consumers who were harmed by illegal practices. Over our four years, we have taken action against credit card companies, payday lenders, banks, mortgage companies, debt collectors, and many more.

We are your resource

Just as Venida and Harry used our resources to get help in the financial marketplace, we welcome you to do the same. We have created a number of tools and resources for you to use to help avoid financial problems, plan for the future, and reach your financial goals.

Whether you’re getting ready to make big financial decisions like Paying for College or Owning a Home, or just looking for unbiased answers to financial questions about your mortgage, your credit score, or how to deal with debt collectors, we’ve got tools to help you get answers and make the best decisions for you and your family.

You have the right to fair and transparent financial products and services and we’re committed to continue working for you.

In the coming days, we’ll share more about the work we’ve done leading up to today, so stay tuned.

Updated July 21, 2015: Graphic and text updated to reflect the amount of relief to consumers who were harmed by illegal practices.

CFPB - Four years working for you infographic