The Consumer Financial Protection Bureau
The Consumer Finance Protection Bureau (CFPB) is responsible for consumer protection in the financial sector. CFPB’s jurisdiction includes credit unions, banks, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the United States. NASCUS closely monitors CFPB developments and responds to requests for comments on rules impacting the credit union system.
Recent 2024 Updates
PUBLISHED FPB joins efforts to stop data practices threatening national security
Today, President Biden signed an executive order to protect Americans’ sensitive personal data from exploitation by countries of concern.
Modern data broker practices have allowed companies to intrude into our digital lives, monetizing our most sensitive data. Corporate data brokers are selling sensitive financial data on American families to scammers, stalkers, and others seeking to spy on us. These data brokers even sell sensitive information about U.S. military personnel.
Research published by Duke University found that the sensitive personal data of U.S. military personnel and veterans—such as health data, financial data, and information about religious practices—can be easily purchased online for as little as 12 cents per record. The study cautioned that “access to this data could be used by foreign and malicious actors to target active-duty military personnel, veterans, and their families and acquaintances for profiling, blackmail, targeting with information campaigns, and more.”
The Consumer Financial Protection Bureau has already begun work to bring much-needed accountability the data broker market. Last year, the CFPB launched rulemaking to address business practices used by data brokers in the surveillance industry. The CFPB will continue to take action to protect the privacy and financial stability of American servicemembers and families.
The CFPB and FTC filed an amicus brief to help ensure that people can hold debt collectors accountable for unlawful fees.
Mortgage fees and other costs have risen significantly in recent years. The Consumer Financial Protection Bureau is focused on how these costs affect the affordability of home ownership as well as household balance sheets. And costs for homeowners are driven up if companies in the mortgage industry can pad their profits with illegal junk fees. The CFPB is working to combat the proliferation of junk fees in consumer financial markets and to ensure that mortgage companies don’t tack on unlawful fees.
The CFPB is the primary enforcer of the Fair Debt Collection Practices Act (FDCPA). We are committed to protecting consumers from debt collectors that break the law, including mortgage servicers which often act as debt collectors and must follow the same rules when they do. As the CFPB has advised, the FDCPA prohibits debt collectors from charging fees that borrowers didn’t agree to upfront unless Congress or a state has passed a law affirmatively allowing them.
The Consumer Financial Protection Bureau (CFPB) today published an order establishing supervisory authority over installment lender World Acceptance.
The CFPB is responsible for supervising a wide range of financial firms to ensure they are complying with federal consumer financial protection laws. The CFPB has supervised nonbank entities in certain industries like mortgage and payday lending, service providers to banks and credit unions, and larger players in particular markets as defined by rule.
The annual percentage rate (APR) margins, the amount of interest credit card issuers charge cardholders on top of benchmark rates, have reached an all-time high.
By some measures, credit cards have never been this expensive. For cardholders who carry a balance without paying it off in full each month, issuers generally charge interest based on annual percentage rates (APRs). In 2022 alone, major credit card companies charged over $105 billion in interest, the primary cost of credit cards to consumers. While the effects of increases to the target federal funds rate have received considerable attention, the average APR margin (the difference between the average APR and the prime rate) has reached an all-time high.
In this analysis, we show that higher APR margin drove about half of the increase in credit card rates over the last decade. In 2023, excess APR margin may have cost the average cardholder over $250. Major credit card companies earned an estimated $25 billion in additional interest revenue by raising APR margin. Increases to the average APR margin – despite lower charge-off rates and a relatively stable share of subprime borrowers – have fueled issuers’ profitability for the past decade. Higher APR margins have allowed credit card companies to generate than other bank activities.
The Consumer Financial Protection Bureau (CFPB) today reported on the first set of results from the newly updated Terms of Credit Card Plans survey. The survey data reveal that large banks are offering worse credit card terms and interest rates than small banks and credit unions, regardless of credit risk. In fact, the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions. This difference can translate to $400 to $500 in additional annual interest for the average cardholder.
Today, the CFPB issued the Nonsufficient Funds Fees Notice of Proposed Rulemaking (NSF NPRM), which proposes to prohibit covered financial institutions from charging fees, such as NSF fees, when a consumer initiates certain payment transactions that are instantaneously declined, on the grounds that charging such fees would constitute an abusive practice. The NSF NPRM proposes the term “covered financial institution” have the same meaning as a “financial institution” in existing Regulation E, 12 CFR 1005.2(i).
Comments on the NSF NPRM must be received on or before March 25, 2024.
Read the NSF NPRM here: www.consumerfinance.gov/rules-policy/rules-under-development/nonsufficient-funds-nsf-fees/.
The Consumer Financial Protection Bureau (CFPB) today to rein in excessive overdraft fees charged by the nation’s biggest financial institutions. The proposal would close an outdated loophole that exempts overdraft lending services from longstanding provisions of the Truth in Lending Act and other consumer financial protection laws. For decades, very large financial institutions have been able to issue highly profitable overdraft loans, which have garnered them billions of dollars in revenue annually. Under the proposal, large banks would be free to extend overdraft loans if they complied with longstanding lending laws, including disclosing any applicable interest rate. Alternatively, banks could charge a fee to recoup their costs at an established benchmark – as low as $3, or at a cost they calculate, if they show their cost data.
The proposed rule would apply to insured financial institutions with more than $10 billion in assets, which covers approximately the 175 largest depository institutions in the country. These institutions typically charge $35 for an overdraft loan, even though the majority of consumers’ debit card overdrafts are for less than $26, and are repaid within three days.
Approximately 23 million households pay overdraft fees in any given year. The CFPB estimates that this rule may save consumers $3.5 billion or more in fees per year. The potential savings would translate to $150 for households that pay overdraft fees. Read more
CFPB Issues Overdraft NPRM
Today, the CFPB issued the Overdraft Notice of Proposed Rulemaking (Overdraft NPRM), which proposes to update regulations that apply to overdraft credit offered by certain financial institutions with more than $10 billion in assets (referred to as “very large financial institutions”) by amending Regulation E and Regulation Z.
As proposed, Regulation Z would generally apply to all overdraft credit provided by very large financial institutions unless (1) the overdraft fee charged to a consumer is at or below the institution’s costs and losses of providing the overdraft service, or (2) the overdraft fee charged to a consumer is set at or below a benchmark fee to be set by the CFPB. The proposal would also update several additional provisions of Regulation E and Regulation Z so that overdraft credit is no longer excepted from those provisions.
Comments on the Overdraft NPRM must be received on or before April 1, 2024.
You can access the Overdraft NPRM and an unofficial redline here: www.consumerfinance.gov/rules-policy/rules-under-development/overdraft-credit-very-large-financial-institutions-proposed-rule/.
Today, the CFPB announced the annual adjustments for inflation to the CFPB’s civil penalty amounts, as required by the Federal Civil Penalties Inflation Adjustment Act, as amended. This final rule is effective on January 15, 2024.
You can access the final rule at: https://www.consumerfinance.gov/rules-policy/final-rules/civil-penalty-inflation-annual-adjustments/.
The Consumer Financial Protection Bureau (CFPB) published an issue spotlight today on the CFPB’s oversight of student loan servicing practices in the early months of the resumption of federal student loan repayments after over three years of a payment pause due to the COVID-19 emergency. Borrowers are encountering long hold times when trying to reach their student loan servicer, experiencing significant delays in application processing times for income-driven repayment plans, and receiving inaccurate billing statements and disclosures.
The CFPB is pleased to announce that the filing period for HMDA data collected in 2023 opened on January 1, 2024. Submissions will be considered timely if received on or before Friday, March 1, 2024. The HMDA Platform provides financial institutions an opportunity to determine whether their loan/application register (LAR) data comply with the reporting requirements outlined in the Filing Instructions Guide for HMDA data collected in 2023.
Submit your data
Access the HMDA Platform to begin the filing process for data collected in 2023 here: https://ffiec.cfpb.gov/filing/.
Users will receive a confirmation email upon submission of their HMDA data. The confirmation email will be sent to the email account of the user that has submitted the data.
Testing your submission?
The Beta Platform found at https://ffiec.beta.cfpb.gov/filing/ will remain available on an ongoing basis for filers wishing to test their submissions. Please note that the Beta Platform is for testing purposes only. No data submitted on the Beta Platform will be considered for compliance with HMDA data reporting requirements. To officially submit your HMDA Data for 2023, visit the live HMDA Platform at https://ffiec.cfpb.gov/filing/.
HMDA Platform Tools provide institutions with assistance in creating their HMDA LAR file. The Online LAR Formatting Tool helps financial institutions, typically those with small volumes of covered loans and applications, create an electronic file that can be submitted to the HMDA Platform. Filers can create their transmittal sheet and LAR rows, entering values for each data field, and use this tool to download the entire LAR file. Filers can also easily edit an existing file by uploading their file to the tool. The Online LAR Formatting Tool does not save any user data.