Latest CFPB Updates
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
Ensuring servicemembers can protect themselves from unlawful financial practices
The Servicemembers Civil Relief Act was passed by Congress to enable servicemembers to devote themselves to the defense of the Nation by providing them key protections. This law’s important provisions include the right to reduced interest on certain loans and shielding servicemembers from foreclosure while they are serving the nation.
In an ongoing case, Citibank has been sued by servicemembers on behalf of themselves and a class of similarly situated people who claim that the bank violated the Servicemembers Civil Relief Act. Four servicemembers say that Citibank charged them and many other active duty servicemembers too much interest on their credit card debt during their military service. Rather than responding on the merits of the servicemembers’ claim, Citibank is fighting their ability even to bring a lawsuit. Citibank is arguing that the servicemembers’ credit-card agreements require them to arbitrate their class claims instead. Last year, a federal judge ruled that the servicemembers are in fact entitled to have their class claims heard in court. Citibank didn’t accept that decision, as it is now appealing the judge’s ruling. And a coalition of businesses — led by the Chamber of Commerce, American Bankers Association, and American Financial Services Association — have sided with Citibank against the group of servicemembers alleging that Citibank broke the law while they were serving their country.
The Consumer Financial Protection Bureau is the primary regulator charged with enforcing and updating rules under the Fair Credit Reporting Act, one of the only cross-sectoral data protection laws in the United States. This law protects the public when it comes to third party aggregations of personal data.
While our work has long focused on protecting consumers from the serious harms stemming from inaccurate background reports related to employment, credit, and housing, there is an emerging consensus that intrusive surveillance and aggregation of personal data can create the conditions for harming national security and undermining freedom.
PUBLISHED CFPB releases 2023 Consumer Response Annual Report
In 2011, the CFPB began hearing directly from consumers about the challenges they face in the marketplace, bringing their concerns to the attention of financial institutions and assisting in addressing their complaints. Last year, we sent more than 1.3 million complaints to more than 3,400 companies for review and response.
Our 2023 Consumer Response Annual Report found a continued increase in credit or consumer reporting complaints, with more than one million of these complaints being sent to the three nationwide consumer reporting companies: Equifax, Experian, and TransUnion.
Consumers also raised issues about fraudulent activity in nearly every product category, including credit or consumer reporting, debt collection, checking or savings accounts, and credit cards.
PUBLISHED CFPB Takes Action to Halt False Claims of ‘Free’ International Money Transfers
the Consumer Financial Protection Bureau (CFPB) issued a new circular warning remittance transfer providers that false advertising about the cost or speed of sending a remittance transfer can violate federal law. Companies in the marketplace are charging junk fees on international money transfers and making false claims about the speed of transfers. The circular highlights several marketing practices relating to sending international money transfers that may violate the Consumer Financial Protection Act’s (CFPA) prohibition on deceptive acts or practices. This prohibition is enforced by the CFPB, states, and other regulators. Guidance in the circular applies both to traditional providers of international money transfers and to “digital wallets” that offer the capability to send money internationally from the United States.
Consumers in the United States send tens of billions of dollars in international remittances every year, often sent by immigrants to family and friends living abroad or to Americans living temporarily abroad, such as students. The CFPB administers and enforces the Remittance Rule under the Electronic Funds Transfer Act, the first and only federal regulation that provides disclosures and other important consumer protections for people who send international remittances from the United States. The CFPB also enforces the Consumer Financial Protection Act, which prohibits unfair, deceptive or abusive acts and practices across consumer finance. Remittance providers may be liable under the CFPA for deceptive marketing practices regardless of whether the provider is in compliance with the disclosure requirements of the Remittance Rule.
CFPB Joins Federal and State Agencies in Coordinated Statements on Tech & Enforcement
Today, federal and state agencies, including the Consumer Financial Protection Bureau (CFPB), released agency-specific action statements on tech capacity. These statements reflect concrete actions to increase tech capacity, including actively hiring technologists – which will help enforce the laws on the book and design remedies that work for consumers, workers, small businesses, and others in the digital era.
Amid a rapidly evolving tech ecosystem – including the wave of attention on generative AI – CFPB technologists work in interdisciplinary teams across the Bureau to help ensure that the rights of consumers are not being violated. This includes helping to identify emerging technology developments, spot potential issues, and where appropriate, help enforce the law and develop lasting remedies.
- The HMDA modified loan/application registers (LARs) are now available for each institution that filed HMDA data collected in 2023. The modified LARs provide each financial institution’s loan-level HMDA data, as modified to protect applicant and borrower privacy in accordance with the Consumer Financial Protection Bureau’s final policy guidance on the disclosure of HMDA data. Users also have the ability to download one combined file that contains all institutions’ modified LAR data.
- The modified LARs can be accessed here: https://ffiec.cfpb.gov/data-publication/modified-lar.
2023 HMDA Data on Mortgage Lending Now Available
The Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data for 2023 are now available on the Federal Financial Institutions Examination Council’s (FFIEC) HMDA Platform for approximately 5,089 HMDA filers. The published data contain loan-level information filed by financial institutions and modified to protect consumer privacy.
To increase public accessibility, the annual loan-level LAR data for each HMDA filer are now available online. Previously, users could obtain LAR data only by making requests to specific institutions for their annual data. To allow for easier public access to all LAR data, the Consumer Financial Protection Bureau’s 2015 HMDA rule made the data for each HMDA filer available electronically on the FFIEC’s HMDA Platform. In addition to institution-specific modified LAR files, users can download one combined file that contains all institutions’ modified LAR data.
The Consumer Financial Protection Bureau (CFPB) does not have a monopoly when it comes to policing abusive conduct. In 2010, when Congress passed the Consumer Financial Protection Act, it made sure that state attorneys general, state regulators, and certain banking regulators were also empowered to root out harmful corporate misconduct. States in particular are at the front line of identifying abuses on the ground. They can step in immediately to stop wrongdoing, or can partner with the CFPB to marshal additional resources to protect their residents.
The federal prohibitions against unfair, deceptive, or abusive acts or practices protect people from a wide range of corporate misconduct, including pitching products to consumers that are set up to fail or using confusing digital dark patterns to prevent consumers from canceling services they do not want. New York State is currently considering legislative reforms to strengthen the state’s consumer protection laws to further protect people from this sort of bad business behavior.
ASC hearing addresses appraisal bias, highlights deficiencies with The Appraisal Foundation
On February 13, the Appraisal Subcommittee (ASC) held a public hearing on appraisal bias, including an examination of The Appraisal Foundation. Homeownership can be a powerful tool for building intergenerational wealth, and a well-functioning mortgage market depends on accurate appraisals. Many minority homebuyers and owners, however, continue to report facing illegal discrimination during the home appraisal process because of their race, national origin, and community demographics.
A little-known non-profit corporation, The Appraisal Foundation, sets qualifications for becoming an appraiser and standards for conducting appraisals. Recent developments, including shifting explanations and deficient policies around conflicts of interest, have raised troubling questions about whether The Appraisal Foundation can realistically address challenges including appraisal bias. CFPB Director Rohit Chopra shared those concerns with his fellow financial regulators in a public comment letter.
CFPB Bans Excessive Credit Card Late Fees, Lowers Typical Fee from $32 to $8
The Consumer Financial Protection Bureau (CFPB) finalized a rule today to cut excessive credit card late fees by closing a loophole exploited by large card issuers. The rule will curb fees that cost American families more than $14 billion a year. The CFPB estimates that American families will save more than $10 billion in late fees annually once the final rule goes into effect by reducing the typical fee from $32 to $8. This will be an average savings of $220 per year for the more than 45 million people who are charged late fees.
Summary: Executive Summary of the Credit Card Penalty Fees Final Rule
Concerned that credit card companies were building a business model on penalties, fee harvesting, and bait-and-switch tactics, Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). The law banned credit card companies from charging excessive penalty fees and established clearer disclosures and consumer protections.
In 2010, the Federal Reserve Board of Governors voted to issue a regulation implementing the CARD Act, which made clear that banks could only charge fees that recover the bank’s costs associated with late payment. However, the rule included an immunity provision that allowed credit card companies to sidestep accountability if they charged no more than $25 for the first late payment, and $35 for subsequent late payments, with both amounts to be adjusted for inflation each year. Those amounts have ballooned to $30 and $41, even as credit card companies have moved to cheaper, digital business processes. Congress transferred authority for administering CARD Act rules from the Fed to the CFPB…
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.
Read CFPB Director Chopra’s statement on today’s Executive Order
Read the White House fact sheet
Unlawful fees in the mortgage market
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.
CFPB Orders Federal Supervision for Installment Lender Following Contested Designation
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.
Credit card interest rate margins at all-time high
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 returns that are significantly higher 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.
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CFPB Issues Revised Supervisory Appeals Process
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CFPB Secures $12 Million From Ringleaders of Foreclosure Relief Scam
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CFPB Issues Nonsufficient Funds Fees NPRM
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/.
CFPB Proposes Rule to Stop New Junk Fees on Bank Accounts
The Consumer Financial Protection Bureau (CFPB) today proposed a rule 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
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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/.
CFPB Addresses Inaccurate Background Check Reports and Sloppy Credit File Sharing Practices
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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/.
CFPB Report Identifies Challenges Faced by Borrowers in Resumption of Student Loan Payments
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.
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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.