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The CFPB launches its nonbank supervision program

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A Beginning

Today marks an important step forward for the CFPB as we work to protect consumers. Going forward, the CFPB will expand its bank supervision program (which began last July) to nonbanks, ensuring that banks and nonbanks play by the same rules.

Before we get ahead of ourselves, it makes sense to remember what a nonbank actually is. A “nonbank” is a company that offers or provides consumer financial products or services but does not have a bank, thrift, or credit union charter.

There are currently thousands of nonbank businesses that offer consumer financial products and services, and consumers interact with them all the time. If you’ve taken out a payday loan, received a call from a debt collector, or accessed your credit report, you may well have done business with one yourself. These common transactions add up to a big part of the overall market for consumer financial products and services, and the importance of nonbanks has grown substantially over the last few decades.

While banks, thrifts, and credit unions historically have been examined by various federal regulators, nonbanks generally have not. Until today. By requiring the CFPB to examine nonbanks, the Dodd-Frank Act – the law that established the CFPB – sought to ensure that consumers get the benefit of federal consumer financial laws on a consistent basis. This consistent supervisory coverage will help level the playing field for all industry participants to create a fairer marketplace for consumers and the responsible businesses that serve them.

The Big Picture for the Nonbank Supervision Program

The CFPB’s supervision program for very large banks, thrifts, and credit unions – those with assets of over $10 billion – began operations on July 21, 2011. The CFPB’s nonbank supervision will now begin in phases. Effective immediately, the CFPB has authority to oversee nonbank businesses, regardless of size, in certain markets: mortgage companies (originators, brokers, and servicers, and loan modification or foreclosure relief services); payday lenders; and private education lenders.

For all other markets – such as debt collection, consumer reporting, auto financing, and money services businesses – the CFPB may supervise “larger participants” after defining what “larger participant” means. We already have taken important first steps to develop a “larger participant” rule – that is, we asked for public feedback on developing a rule. So far, we’ve received thousands of public comments and have met with trade groups, consumer and civil rights groups, and various state and federal regulators to get their input.

Based on their feedback, we have been hard at work preparing an initial “larger participant” rule. We will issue a proposed initial rule very soon. We will notify you on this blog when we announce the publication of the proposed rule and tell you how you can comment on our proposal.

The Dodd-Frank Act also says that the CFPB may supervise any nonbank that it has a reason to determine is engaging or has engaged in conduct that poses risks to consumers with regard to consumer financial products or services. The CFPB will be publishing rules setting out procedural guidelines for implementation of this provision.

Our Tools – Some of the Nitty Gritty

The purpose of the CFPB’s nonbank supervision is to prevent harm to consumers and promote the development of markets for consumer financial products and services that are fair, transparent, and competitive. To accomplish these goals, the CFPB will assess whether nonbanks are conducting their businesses in compliance with federal consumer financial laws, such as the Truth in Lending Act and the Equal Credit Opportunity Act.

What will we do? The CFPB’s approach to nonbank examination will be the same as its approach to bank examination. It may include a combination of any of the following tools: requiring nonbanks to file certain reports, reviewing the materials the companies actually use to offer those products and services, reviewing their compliance systems and procedures, and reviewing what they promised consumers. In general, we will notify a nonbank in advance of an upcoming examination.

Consistent with the Dodd-Frank Act, the CFPB is implementing a risk-based nonbank supervision program. On an ongoing basis, we will be assessing the risks posed to consumers in the relevant product markets. When considering whether and how to supervise particular nonbanks, we will consider several relevant factors, including the nonbank’s volume of business, types of products or services, and the extent of state oversight.

The CFPB will coordinate with other federal and state regulators. This coordination will help us allocate resources where they are most needed and minimize burdens on the nonbanks.

We have built – and continue to build – a highly qualified supervision and examination staff to execute on all of these important goals. Many examiners have come to the CFPB from state and federal bank and financial services regulatory agencies and they bring extensive experience in conducting examinations. We are training all of our examiners in CFPB supervision policies and procedures and integrating them into a coherent team. Our supervision staff will cover the nation, reporting to regional offices in San Francisco, Chicago, Washington, D.C., and New York.

Ongoing Dialogue

As we move forward in building and implementing our supervision program, we will keep you informed of important developments, policies, and procedures.

We also want to hear from you. We would like this blog to be part of an ongoing conversation with you about the CFPB supervision program. If you have questions or comments about our supervision program, please provide them in the comment section below.

  • MS Mortgage Broker

    That all sounds great.  it you really were interested in leveling the playing field why dont you require loan officers that work forbanks to the strict licensing requirements that loan officers for brokers are subjected to??? 

    Also if you guys keeps putting all the regulatory requirements on the small nonbanks there will be none left.  And in case you didnt know when you do away with the competition guess who suffers????  you got it!  the consumer you so desperately are trying to protect.

    We need to keep in mind the brokers are tired of being the scapegoat for the recent mortgage crisis.  The consumer needs to quit screaming foul and take responsiblity for there decisions as well.

    • Bosomo

      their*

  • Against nonbank loans

    Those payday loan and title loan companies are making the poor absolutely destitute. The inteerst rate is 220% annually and higher, none of this is explained to the ordianary Joe when they smile and give him 25 pages of 6 point type to hurry and sign so he can get the loan check. Eager to sign because of being there 2 hours already and little kids to feed and gas to buy to get to work on time. Then he pays and pays and pays but the balance never goes down, eventually his vehicle is siezed and he has no way to get to work!

    • GA LO

      People have the choice to agree to the terms or not. If a person does not have the means to pay back ANY loan, they shouldn’t borrow the money. The excuse of “I need to feed my kids” is ridiculous because there are many programs to take care of that. Socialism does not belong in banking.

    • http://pulse.yahoo.com/_ANJGP5PXN3KRRS3VAMSNSBM3HA SS

      Dont go to them!

    • Eddiewoodgold

      You have absolutely no clue considering the reality of Payday loans.  First of all I can go in to get a loan, sign a 1 page document that tells me exactly how much interest, and my total payment due.  I can also be out in less than 3 minutes.  Consider if I write a 10.00 check to the bank they will charge me $35.00 twice to run my check through and then $5.00 a day until my account has a positive balance.  That’s $70.00 just to tell me I don’t have enough money!  I can borrow $50.00 from a Payday loan store for $7.50 for 30 days! I can cover 5 nsf checks that the bank would charge me $350.00 for.  DO THE MATH.  These loans are not long term notes but server their purpose as a vialbe alternative to many abusive Bank, credit card, and utility company practices.  I could go on for pages but usually uninformed people as yourself have so much liberal tunnelvision you can’t or won’t look at the real facts.  Also payday loans do not cater to the poor.   The average income for a customer is well over $30,000.

    • AZDFI Licensed LO

      Those payday loan places should NOT be lumped in with SAFE Act licensed mortgage broker though.  
      Read the SAFE ACT, the 2005 Georgetown Study and the 2010 Harvard Study. Conclusion, the most highly regulated sector of the financial services industry (the mortgage broker) didn’t create the mortgage/housing crisis. Also, enough with calling us lightly regulated. Lastly, any regulator, state or federal (Wells Fargo, Bofa, Chase, Citibank, Credit Unions, ANYONE that originates a mortgage) should be required to pass the safe act tests.  Don’t you think THAT would be fair?

  • Greg

    Why do I not trust that this group can actually protect consumers? BTW, for the guy that signed a payday loan, doesn’t he bear some responsibility for signing the bottom line? I never signed a payday loan in my life nor ever will, because the rates are outrageous. That doesn’t mean we need the weight of crushing regulations everywhere just because some fool does make a stupid mistake. The freedom to make the right choice includes the freedom to make the wrong choice.

    • Patrick

      I think if you look at the mortgage disclosure proposals on this website, you’ll see that one of the main points of this agency is to create easily-readable and understandable disclosure requirements that various consumer financial product companies must use.  This is going to be a great benefit to middle-class and working class consumers.  Personally, I know some members of my own family who have good jobs, good educations, and great kids who got into credit card and mortgage trouble because they didn’t have mortgage or credit card industry work experience and signed documents that they didn’t quite understand.

      I’m sympathetic to the fact that “buyers should beware” but if it’s impossible to compare one product to another product and a finance company is allowed to bury the most relevant details in 6 point font on a tiny piece of paper – how is that a fair and efficient market.  I want to see clearly that one or another company is giving me a better deal so that the most competitive business can win my money.  That’s what this agency is doing.

      • ~Rico~

        Patrick- I think you overstate the impact that the “new and improved” disclosures will have on middle and working-class consumers. The typical borrower didn’t care previously, and doesn’t care now what is in the disclosures. All they are interested in is getting the money at any cost. It is only after things go badly that consumers suddenly find religion in the minutae of the disclosures and become interested in what they actually signed on for. Congress and the regulators already compel lenders to provide borrowers with all of the information they need to make an informed credit decision. Those same Congress critters and regulators now complain that the 3 inches of documentation containing that information is too difficult for the average consumer to understand. That may or may not be true, but you can only dumb down the information so much and in the end, consumers aren’t going to pay attention until after the fact anyway.

        Btw, I have never seen a mortgage disclosure that buries the most relevant details of the transaction in 6 point font on a tiny piece of paper. That may be true for credit cards, pay day lenders, and the like, but it is most certainly hyperbolic and untrue when it comes to mortgage lending.

      • Brad

        Patrick, you absolutely nailed it.  The CFPB is not a socialist agency created to make decisions for people, but rather to make sure people can make informed decisions.  I believe in Capitalism and that everyone is responsible for their own actions and you can not protect people from themselves.  However, it is not fair for hard-working middle class families to be taken advantage of by creditors and mortgage lenders by hidden fees and fine print.  The CFPB will not prevent the consumer from making bad decisions, but will do its best to make sure consumers are not being taken advantage of and have all the information necessary to make an informed decision.

        • Rich

          Uneducated (stupid) people cannot make informed decisions.  Proof: hundreds of thousand of people bought expensive houses that they should have known were way, way, beyond their means. Why?  They were stupid! We should be looking at the Department of Education rather than starting another Gov.burearacy which is funded by the Federal Reserve and not Congress. The CFPB is not a socialist agency, it’s worse whatever it becomes.

          • Anonymous

            You might want to read the Financial Crisis Inquiry Commission final report or the book “Retirement Heist” or other books that describe what happened to get us in this mess. Over 80% of the Liar loans were forged by mortgage brokers for the 4% commission and not owning the mortgage, thrown over the fence to be sucuritized. Goldman Sachs and Citibank made a lot of money, and recently fined(not enough) for their hand in the fraud.

      • Kevin Tenhaken

        Patrick,
        It sounds as if you want your cake and eat it too.  In these days of greater regulation, why do we have to wonder why mortgage disclosure information is overwelming?  Now we are supposed to believe this new agency will bring releaf to the consumer because he doesn’t understand what he is signing.  Rediculous. 

        • Bosomo

          Relief* Ridiculous*

          Seriously people lets spell correctly here, how can we have a civilized discussion with uncivilized habits. It’s not that hard.

        • Bosomo

          Relief* Ridiculous*

          Seriously people lets spell correctly here, how can we have a civilized discussion with uncivilized habits. It’s not that hard.

      • Neverfollowtheherd

        i hope they can make the disclosure process easier but right now the government requires 30+ pages to be signed just for disclosures on a mortgage.  do we really need this many?  and patrick i’m sorry anyone who has closed a loan knows that none of the important terms are hidden in 6 point font.  the interest rate, payment, term, all must be disclosed and are in plain sight.  the problem is too much paperwork not too little font. 

      • Anonymous

        Yep. You hit the nail on the head, Patrick. Nice post.

      • AZDFI Licensed LO

        Read the SAFE ACT, the 2005 Georgetown Study and the 2010 Harvard Study. Conclusion, the most highly regulated sector of the financial services industry (the mortgage broker) didn’t create the mortgage/housing crisis. Also, enough with calling us lightly regulated. Lastly, any regulator, state or federal (Wells Fargo, Bofa, Chase, Citibank, Credit Unions, ANYONE that originates a mortgage) should be required to pass the safe act tests.  Don’t you think THAT would be fair?

    • Anonymous

      What many people are not aware of is that the Payday Loan are fronts for the banks like Wells Fargo. It is very Profitable for these banks.

  • dandr50

    I hope you will decide that the credit bureaus will fall under your authority.  The different bureaus have different modeling/scoring and the institutions who subscribe to them set their own modeling further with each bureau.  This results in the credit report available to the consumer is very different than what the financial institutions receive and base their decisions on.  If you really want to be fair to the consumer without being unduly harsh with the financial institutions, you need to set standards for the credit bureaus to follow so the credit scores given to the consumer is one they can rely on when they apply for credit, no matter where that might be.

    The comment below by a mortgage broke doesn’t describe at all what would be equal.  Maybe he/she doesn’t know how regulated financial institution are subjected to thay they are not.  You already have all of the information that would now be required of the non-bank institutions from financial institutions that is gathered in many numerous ways. 

    I do agree with the commenter in that if the regulations continue to be egregious and expanding as they have been for the last two years, the result will be fewer financial institutions to regulate and fewer choices for the consumer.  If your intent is to protect the consumer, you should seriously consider trying to protect the smaller community banks and credit unions.  They are already starting to be consumed by the big guns, who seem to get all the breaks.

    • Glen

      I agree credit bureaus have turned in to a monster that is almost impossible to correct. When they get started they gang tackle and you cant defend yourself without a lawyer or a lot of time I believe that they will make them selves irrelevant and I Can’t wait!

  • Terrywhite8251

    Why is Congress always trying to reinvent the wheel? Aren’t they the real problem? 50 states already do a good job of supervising most non banking companies. My state, Mississippi has a great Consumer Finance Dept which supervises the banks and small loan lenders. Mississippi has fewer bank failures than most states. They already have feet on the ground that understand the needs of both the consumer and lending industry. I think they should continue the supervision. Don’t fix what isn’t broke.

    • Bluerose19564

      Not ALL the states do the great job your state is doing. I live in Texas where the people voting whether to monitor the payday lenders own payday lending companies so, of course, they don’t want any monitoring. It might cut into their profits.

  • http://www.freesheetmusic.net/ Free Sheet Music

    But isn’t this already covered by the states?

    • http://www.NationalFinancialEducationCenter.org/ Todd

      Some states have addressed the issue. Many, though, still have a pretty laissez-faire attitude towards them. At most, these states will size of the amount of the loan or the number of times it can be “rolled over.”

  • http://twitter.com/_G8 G Eight

    Thanks Sen. Durbin! Where shall I send the thank you card?

    • http://pulse.yahoo.com/_ANJGP5PXN3KRRS3VAMSNSBM3HA SS

      Send it to the employees who will lose jobs as businesses decide to stop lending rather than comply with this government oversight.  Its already happened to a “Banker” in Georgia who decided to simply “stop banking” and stop “small business loans”, rather than comply with much of the new rules under FD.  The cost was simply too great to him.

      • Anonymous

        Have you read the Financial Crisis Inquiry Commission final report? The American Economy was highjacked by not having anyone look out for the average American. I can understand your position if you were one of those in the highjacking business but for the majority of Americans, this new agency is badly needed.

  • regular american

    yay. more regulations to protect us dumb americans. How did we ever live on our own before this wonderful govenment decided to take over everything? Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.

    • Patrick

      I think if you look at the mortgage disclosure proposals on this website, you’ll see that one of the main points of this agency is to create easily-readable and understandable disclosure requirements that various consumer financial product companies must use.  This is going to be a great benefit to middle-class and working class consumers.  Personally, I know some members of my own family who have good jobs, good educations, and great kids who got into credit card and mortgage trouble because they didn’t have mortgage or credit card industry work experience and signed documents that they didn’t quite understand.I’m sympathetic to the fact that “buyers should beware” but if it’s impossible to compare one product to another product and a finance company is allowed to bury the most relevant details in 6 point font on a tiny piece of paper – how is that a fair and efficient market.  I want to see clearly that one or another company is giving me a better deal so that the most competitive business can win my money.  That’s what this agency is doing.

      • Terry

        If the consumer would do due diligence he could made an educated choice but most want.  The consumer has to be accountable for their decision. I don’t think bigger print will solve the problem if the consumer just isn’t interested in doing so. 

        • Anonymous

          Why is it? We think we are re-inventing the wheel with this new agency? When I first bought my house under the GI Bill, I had someone looking out for me, the bank and the realtor along with the VA. All that went away with “get the government off our backs” and “let the market regulate itself”. These two positions opened the door to “thieves and fraudsters” and no one looking out for the Average Amerian, like it was over 30 years ago.
          It did not impede me from buying my first house with making sure I was a good risk and having checks and balances. Unlike what has gotten us into this mess.

          • Terry

            What is the difference now compared to 30 years ago? In my community the local small banks and businesses are gone. Dealing with people you know and trust has gone way. We don’t have that in America any longer. I personally do not think goverment is the answer to our Nations problems.

    • Anonymous

      Most people do not know “how to read the fine print” of a contract. They are “dumb” when it comes to the fine print. But are pretty smart fixing your plumbing or building your house. Without someone looking out for the “dumb plumber or carpenter” is what got us in this mess. People steal, people rob, and this agency will police those who rob and steal or take advantage of the “dumb plumber”.

      • MS Mortgage Broker

        Funny how these “dumb plumbers and carpenters”  can sure find a way to hide thier income when it comes time to prepare their tax returns.   If many of them would have honestly reported all their income they wouldn’t have to take out the stated income loans to start with.

        By the way the last time i looked the loan application specifically spells out the interest rate, loan amount, term, APR all in bold type.  It’s time these poor consumers take responsiblity for home ownership which includes paying your bills! 

        The government has incorrectly bread into the american people that it should be a “right” to own a home and not a privilige.

        Bottom line is that all should take responsibility for the mortgage crisis.  The lenders and brokers, the government, and last but not least the consumer.

  • Guvguy

    Dodd/Frank is an ill-conceived law made by people who believe everyone should receive the same interest rate.  Along with rules promulgated by the Federal Reserve, we have essentially eliminated private capital in the mortgage market with government subsidized loans.  It is clear that someone will pay for these subsidies.  We have already seen that “someone” is the American taxpayer.  Despite the government subsidies, nearly a third of all mortgage applications are being rejected.  Private capital would gladly lend to many of these borrowers but thanks to rules like the higher-cost loan rule and Dodd/Frank’s dramatic lowering of HOEPA triggers, it is not practical to make loans at an increased risk level.  Soon, we will have a nation with a high proportion of renters and the government in total control of our finances.  The CPFB is merely the strong-arm of government enforcement.  I don’t see the direction it is headed as a friend to our economy.

    • TheOne

      We are seeing the direct effects of this in our private money lending service. It is causing us to rethink our business plan and possibly get out of the residential private money lending world. This will in turn make it nearly impossible for many consumers turned away by banks due to poor credit or other such reasons.

    • Glen

      not even worth a reply

    • Anonymous

      We, the people, who work and save with labor, have been taken advantage of. Non-disclosure of charges and interest comes to mind. People that work in Finance have taken an attitude that people are stupid and deserve to be taken advantage of. Well, not anymore with this agency. The Financial Predators will have to find another job or if they choose to operate as in the past, might wind up in jail.

  • Sally Poff

    Testing comment posting.

  • WBROOK540

    IT’S ABOUT TIME THAT ACTION IS BEING TAKEN AGAINST SCABBING OF THE LITTLE PEOPLE HERE IN AMERICA. TODAY, THESE PAYDAY LOAN PEOPLE WHO ARE BEING CAPITALIZED BY BANKS AND OTHER LAUNDRING FACTORS ARE STEALING THIS SOCIETY OF EVERY THING IT HAS.
    FIVE HUNDRED PERCENT IS FAR TOO MUCH TO PAY TO BORROW MONEY IN A SOCIAL SOCIETY. 

    • CP

      Then don’t borrow!!!

    • Cat26

      I agree with your post.  The “little people” in America have very little.  Several of the people who remarked on this site need to open their eyes and shut their mouths until they realize what is really happening to families everyday.  I am a single mom of 3 children.  I live in a very small town.  I have borrowed from the payday places because I had nowhere else to get help.  My credit is not good because of a divorce and bills my ex refused to pay before the divorce that I am still paying on.  I currently use a local food pantry and one that comes to town ONCE a month to feed my family.  I do not qualify for food stamps or other assistance because I make too much money (what a joke).  My children had no Christmas this year.  Americans need to wake up and maybe instead of making comments that are not only unfeeling but just plain ignorant could give some positive advice such as what would you do in a situation where you couldn’t make ends meet?  This is very real and most of the time not self-induced problem today.  Thanks to this website for allowing me to voice my opinion.

  • Marylougrier

    Organizations such as PayPal, Ebay and Credit Reporting Agencies do not do an adequate job addressing consumer concerns.  A recent documentary exposed abuses by showing that a long series of phone calls to PayPal concerning a non-profit fund raising drive to collect 2 donations from individual donors resulted in a freeze on Registry’s account.  An employee at PayPal  told the customer her account was frozen because “donations can be made to cats, but a donation to a human is a sale.”  Therefore each transaction was charged a fee by PayPal.

    My elderly father has also had long and extensive problems with PayPal and its business partner, Ebay.  They do not answer with a human and do not address his concerns with a reasonable inquiry.    Frequently his access to his bank account with Pay Pal is frozen while they investigate.  This results in negative feedback on Ebay.  Ebay then uses the negative feedback as a reason to terminate his account.  There is sharing of private banking and credit card information going on between Ebay and PayPal to shut him out from using a different account for separate items that he wants to sell under a different corporate name or to use a different credit card number.  The Ebay and PayPal violation of state bank privacy laws prevents me and my husband from having our own accounts because of the fact that we have the same physical address.What can be done to force these companies to (1) obey bank privacy laws; (2) put a real live person on the phone each time (preferably the same  person) to address a problem because computers and voice mail recordings can’t address customer complaints; (3) apply Fair Debt Collection Practices Act to the three major Credit Reporting Bureaus, who are being used by banks to collect debt.

    • http://studygre.org/ Study GRE

      I am also interested in having these concerns addressed.  Nice post, Marylou.

    • http://studygre.org/ Study GRE

      I am also interested in having these concerns addressed.  Nice post, Marylou.

  • GA LO

    I have a question? Yesterday it was reported that the playing field was going to be evened for Mortgage Originators, and here you mention “non-bank” entities, why then are banks not being focused on at the same time. Why can “loan officers” employed by banks be allowed to conduct business without a license? How is this leveling the playing field and looking for the best interests of the consumer? 

    • GA LO

      I also want to be sure to state that I do not agree with the predatory lending practices of the past, but why should we continue to make it harder for the ones who do the “right thing” in conducting business. Seems a little unconstitutional. Remember while protecting the public, LOs are citizens too.

    • MS Mortgage Broker

      Probably because the government is really not concerned about protecting the consumer as much as they are about promoting the big banks.  That’s why they have tried their best to put the little non banks out of business. 

  • Argylesoxman

    I am hopeful that this agency will look at all of the existing required reviews / audits / reporting of non bank mortgage servericers.  We are poked, proded, audited, examined by a host of governmental and non governmental agencies.  Start with those of us that are HAMP Servicers.  Nowhere in the history of this industry has there ever been more examination and reporting.  And then top that off with training.  We have trained the examiners how the business works.  Do we have to assume that we will be repeating that painful and expensive excercise with this agency too?  Please do not repeat and add on to the over bearing expense that we now enjoy and impact the thinning margins in this business.  You will kill companies! 

  • lpeg

    “When considering whether and how to supervise particular nonbanks, we will consider several relevant factors, including the nonbank’s volume of business, types of products or services, and the extent of state oversight.” It would seem logical that the CFPB would immediately define a process that nonbanks can use to determine if they do or do not fall under CFPB supervision of particular nonbanks. Please consider creating a rule as allowed under section 1022 that will bring transparency to this issue. Thank you.    

  • Mark Weliky

    Regulating the debt buying industry which is based upon the collection of default judgments gained through sewer service and/or fraudulent legal filings would certainly be welcome.  Americans have had billions of their hard earned dollars transferred over to a small number of greedy, consciousless individuals over the last ten years.  It’s about time that our tax dollars go towards protecting us from these unscrupulous companies.

  • Straightdown

    When is someone going to do something about the tax relief companies?

  • Scott Diller

    I hope Bank of America is a non bank! They always tell me, “Sir were not a bank” what they and countrywide and payday lenders did can not be allowed to continue or happen again. Hope we can trust you to do what is right for the real Bank of America, the citizens of America.

    • M. Clinton Richter

      How were payday lenders who issue $300 loans to people responsible for the financial meltdown of 2008?  I’m still trying  to figure that one out.  Please enlighten me on the subject.   The real culprit is the federal government and its quasi-private mortgage giants Freddie Mac and Fannie Mae.  Interesting how those out of control organizations got a pass in Dodd-Frank.   The CFPB is unaccountable to Congress and operates in violation of the Constitution.

  • Anonymous

    Having worked in the student financial aid field for my enitre adult life, I am hopeful that this organization will be able to curb the abuses of students and their families at the hands of private student loan lenders. A wolf is sheeps clothing – the “state backed” non-profit private loan lenders that provide “free financial aid and admissions assistance” only to use this as a marketing tool. Students sign up for a scholarship search tool only to have their information sold to credit card companies and get swamped with offers for private loans. It is shameful and I hope someone is able to do something to stop them in their tracks. 

  • Gil McLean

    It is ironic that a government agency is created because a mortgage bubble exploded and left a big mess all over the country.   It was a big clumsy government that contributed most to the creation of the bubble.   Legislators and bureaucrats kept passing laws and issuing regulations that demanded that lenders grant loans to millions of people who could not repay them.   Then the legislators and bureaucrats would ceaselessly insist that insurance companies grant coverage to people who were unable to maintain their homes.   The people who helped create the CFPB are negligently unobservant of the fact that as government becomes more and more obese and clumsy it creates more problems than it solves.   The CFPB will inevitably create many unintended consequences.  All clumsy and obese institutions are helpless to avoid such dire consequences. Finally,  the creation of CFPB demonstrates a deep disrespect for taxpayers whose children, grandchildren and greatchildren will have to pay many extra dollars through their extra taxes to pay all the interest on the huge amounts of money the obese government will have to borrow to create the superfluous new agency.

    • Anonymous

      Take the time to go to the Stanford Website on the Financial Crisis Inquiry Commission final report. You will learn something that debunks the myth that people knew they could not afford the homes they signed for. Not true.
      They were taken advantage of and lied to.

  • Aagrantwriter4u

    Thank you for developing a phenominal support system for all of us consumers.  I am in the process of providing Commercial Mortgage Mediation services to the African American Churches abroad and would ask if the Consumerfinance Protection Bureau could assist me in a Grievence Procedure that my clients could follow, per chance they were dissatisfied with our services

  • http://www.filmschoolsonline.com/acting-schools.html Acting School

    The 2010 Dodd-Frank financial reform law has begun restoring
    common-sense in financial services and reducing risky lending practices.
    Especially important, consumers now have a champion in the Consumer
    Financial Protection Bureau (CFPB), which will ensure that loans provide
    value—not landmines—to borrowers.

    • Robertb

      You must be on drugs

  • Patsywaybourn

    I am very hopeful this new bureau can rein in the abuses of the likes of pay day lenders and cash for car title lenders.  I have never used one but I know people who have out of desperation during these hard times.  They are basically criminal loan sharks who at one time would have gone to jail for Racketeering, and Organized criminal Activity, to  wit, Loan Sharking.  I don’t know how they ever became legal.  I suspect they paid off the right people which is how these kinds of criminals get  favorable legal treatment.  We have laws against theft, robbery, etc. but we haven’t had laws to nail  these  criminals.  And, you  cannot rely on states to nail them because they have a very powerful legislative lobby.  A bill to regulate them was introduced in the last session of the Texas legislature but went no where.  I wrote my congressman about these people  in 2007 but never heard a word in response. 

    • Terry

      The abuses you describe sound like overdraft fees at banks. One reason payday lending began was to counter the expense of overdraft fees. 

      • Anonymous

        How much is an overdraft fee? $25 but Payday loans are charging 225% interest? Don’t think so.

        • Terry

          Take your example of $25.00  overdraft fee on a $100.00 check. The APR is 345%. A 15.00 charge would equal the 225% apr.

          • Anonymous

            OK, both need to be disclosed. I found out about “forbearance” a six month 33% interest rate loan but not disclosed. Fortunately, I turned down the “forbearance” but mainly because I did not trust the bank to offer me something to “help me out”. There was absolutely No Disclosure, no where could you find in plain English that the bank was charging me, what was equivalent to a full month’s mortgage payment for signing up for a “forebearance”. The number was confusing to find, until I put the payments as “pictures” with check amounts written on them. The bank was making equal to 33% annual interest on a six month loan, and with a huge lump sum, six months plus an additional month of charges equal to a full month mortgage payment equal to 33% interest.

            The CFPB will force the Banksters to disclose in plain English what charges are. Thank goodness. I bet many people lost their homes with forebearance offers.

  • http://www.internationalpatentservice.com/ Patent Trademark Attorney

    Many of the states have addressed the issue. Many, though, still have a pretty positive  attitude towards them.

  • http://www.regencymtg.com/ Qmort

    All in all, I think this is a good thing. But, I caution the Bureau about over regulating to a point where it becomes too costly for small non-banks to compete, or even to survive. Most of us left in this business are here for all the right reasons and take what we do very seriously. If the Bureau can become a partner and use its powers to help guide our industry in a more positive direction and in one that will benefit the consumer, then I look forward to it. If it chooses just to burden us all with more regulation and bury us in more reporting requirements and new fees, then this won’t work.

  • Rich

    Uneducated (stupid) people cannot make informed decisions.  Proof: hundreds of thousand of people bought expensive houses that they should have known were way, way, beyond their means. Why?  They were stupid! We should be looking at the Department of Education rather than starting another Gov.burearacy which is funded by the Federal Reserve and not Congress. The CFPB is not a socialist agency, it’s worse whatever it becomes.

  • http://pulse.yahoo.com/_ANJGP5PXN3KRRS3VAMSNSBM3HA SS

    Who is this organization accountable to.  Its under the federal reserve?  Whats to keep this organization from running wild and causing more harm than good.  Whats the cost going to be to business to comply with all these “investigations”, compliance and forms.  How manu will simply “get out” of their businesses alltogether because of this “red tape” nightmare.  This CFPB scares me. 

    • http://www.deoslaw.com/ Deoslaw

      We’ve seen the results of lack of accountability in the massive fraud effected on the American people in the destruction of our national economy.  The irony is that those who complain about lack of accountability are asking us to choose between whether we prefer to place trust into institutions motivated and measured exclusively by making money regardless of the cost to our country and its communities; or whether we prefer to place that trust in an agency charged with protecting consumer interests.  Further, the fact is that the CFPB is just as accountable to the American people as any executive branch agency responsible for implementing the laws passed by our legislature.  

    • http://www.deoslaw.com/ Deoslaw

      We’ve seen the results of lack of accountability in the massive fraud effected on the American people in the destruction of our national economy.  The irony is that those who complain about lack of accountability are asking us to choose between whether we prefer to place trust into institutions motivated and measured exclusively by making money regardless of the cost to our country and its communities; or whether we prefer to place that trust in an agency charged with protecting consumer interests.  Further, the fact is that the CFPB is just as accountable to the American people as any executive branch agency responsible for implementing the laws passed by our legislature.  

  • http://pulse.yahoo.com/_ANJGP5PXN3KRRS3VAMSNSBM3HA SS

    Im amazed how people can be applauding this CFPB.  Dont you realize, this organization is accountable to NO ONE!!!  Dont you understand what happens when an agency has no accountability.   Make no mistake.  You will eventually see LESS student loans approved, LESS financial instruments available for people.  Not more.

    • Anonymous

      The CFPB are accountable, to the American People. There has been no accoutabilty except to Corporate Profits with no moral compass.

  • Mustafa

    It’s time to go after the Homeowners Association Board of Directors and their Managment Company and HOA collection agency. I am going to do my part. here in california we have alot of crooked Property managent companys and Board members.

  • http://www.smallbusinessgrants.net/small-business-grants/ Government Business Grant

    The CFPB is officially overseeing non-bank financial companies, including mortgage lenders, as of Wednesday and the appointment of its first-ever director, Richard Cordray. How the agency will go about enforcement of its regulatory power is another story, but American Banker spoke with Peggy Twohig, the bureau’s associate director for nonbank supervision, to gain insight into the process.

  • http://www.prestigebeds.co.uk/ Prestibe Bed shops

    i think this is a great move forward, not only will it give the good companies  more credibility, it should help  somepeople avoid the bad ones

  • Neverfollowtheherd

    perfect now require bank loan officers to be held to the same strict licensing standard that non-bank loan officers already are held to.  this would be the first step in truly leveling the playing field.

  • http://doddfranksummary.com/ Dodd Frank Summary

    This sounds like a great, multi-lateral plan. I look forward to seeing its implementation and I’m glad you all are moving forward so quickly.  Wasting no time! :-)

  • http://www.pesgroupltd.co.uk/power-factor-correction.html Power factor correction

    i think this is a great step forward.  to consumer protection as well as giving  some of these companies someoine to answer too.

  • Bluerose19564

    I took out payday loans and found myself trying desperately to pay them back and being unable to and taking out yet another oayday loan just so I could buy food for my family and pay the bills. I ended up with 6 payday loans. I had no choice but to close my checking account and default on these loans. It was the only way to stop the interest and make the payments more affordable. It has wreaked havoc on my credit rating which was already bad to begin with. I was working on it and now it seems I will never get out of this hole I dug myself into. Three of the payday lenders never responded to my offer of payment in smaller increments and I strongly suspect after having seen complaints about them online that they were just scammers who were taking money out of my account every month without any of it being applied to the balance. On top of all that, because I applied online for these payday loans through a payday loan finder service my information is out there and was sold to various entities and I keep getting harassing calls from people (mostly sounding like they are in India) who don’t give me their real names and threaten to jail me for fraud for making online applications with flase information. I am tired and afraid. These people have even called me at 1 or 2 am.

  • Eckhard Puehse

    Hi, one thing come to mind immediately. Companies like ebay, paypal, ABE books and many more that dispense funds to their customers usually have a lage period where they hold monies that could be instantly transferred for day or even weeks earning interest on literally millions of dollars. For instance if I have a balance in my paypal account I can transfer it to my bank. The electronic transfer will take 4 days. But when I spend money using my paypal account the money is instantly transferred out. Similarly with ABE books where I sell books. If they owe me money it will take a week before they make a payment. re: Ebay, I had to refund for an item, the money was taken straight out of my bank account but the recipient did not get the funds for 2 weeks. There is something chronically wrong the way corporations hold funds. I hope this will be a subject for  investigation because it effects millions of consumers. Thank you for listening. Eckhard Puehse  

  • Eddiewoodgold

    Many people would like to know if your true intent considering payday loans is to deny customers access to emergency cash by effectively putting them out of business by implementing a 36% rate cap.  I use these loans when it is necessary and consider efforts by those who never need them and try to tell me I’m to stupid to run my own finanances insulting at best.  I am en economics professor at a large university and can make financial decisions myself without the help of the government or do-gooder organizations.  Thank you.

  • http://www.filmschoolsonline.com/film-schools/film-schools-education-and-training.html Film Studies

    Features of the nonbank supervision program include conducting
    individual examinations and may also include requiring reports from
    businesses to determine what businesses need greater focus.  The agency
    has said that how often and to what degree the examinations are
    performed will depend on CFPB’s analysis of risks posed to consumers
    based on factors such as the nonbank’s volume of business, types of
    products or services, and the extent of state oversight.

  • AZDFI Licensed LO

    Memo to the CFPB: Read the SAFE ACT, the 2005 Georgetown Study and the 2010 Harvard Study. Conclusion, the most highly regulated sector of the financial services industry (the mortgage broker) didn’t create the mortgage/housing crisis. Also, enough with calling us lightly regulated. Lastly, any regulator, state or federal (Wells Fargo, Bofa, Chase, Citibank, Credit Unions, ANYONE that originates a mortgage) should be required to pass the safe act tests.  Don’t you think THAT would be fair?

    • Terry

      After 40 years of Mortgage lending I quit. The reason the SAFE Act. The cost to get and maintain the right to make a mortgage loan was to high for a small business. The 50 loans I service do not qualify with most banks for additional cash or refinancing so these CONSUMERS are trapped. Is that helping the Consumer? The ones exempt from the SAFe Act.(Wells Fargo,Citibank,Bank of America)
      Didn’t they create the problem?

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.