Jul 2011

Enforcement Coming? Via the CFPB

By Marc Shaw

It seems to be well known that the Consumer Financial Protection Bureau (CFPB) intends to be fully operational and hit the ground running on July 21, 2011.

The CFPB revealed on April 11, 2011, that it has agreed on a Joint Statement of Principles with the National Association of Attorneys General (NAAG) to govern their interactions in enforcing the Dodd-Frank Wall Street Reform and Consumer Protection Act over the counter weight loss and CFPB regulations. In a notice published by the US Dept of Treasury the CFPB seeks comments on its plans for collecting data to assist it in developing model forms integrating the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures required for residential mortgage loans. The Dodd-Frank Act mandated that the CFPB develop the forms.

In a Joint Statement, the agencies and key personnel agree to regularly meet in order to identify mutual enforcement priorities, share complaints, and support each other’s enforcement efforts, including through joint or coordinated investigations and coordinated enforcement actions.

In her remarks, Ms. Elizabeth Warren indicated that more than 50 % of the budget would be dedicated to supervision and enforcement, which she described as the CFPB’s first priority. According to Ms. Warren, although the Dodd-Frank Act requires only that the CFPB establish a Consumer Advisory Board, the CFPB will likely establish additional advisory boards.

The filing of the notice demonstrates the intention of the CFPB to promptly move forward on developing the forms once TILA and RESPA rulemaking authority is transferred to the CFPB on July 21, 2011.

An enforcement arm to both TILA and RESPA are essential in this new economy.  With small businesses feeling the squeeze it is crucial that consumers are protected from unfair practices and higher fees being passed on.  Whether it is RESPA’s anti kick-back rules or TILA disclosure laws, etc. actual enforcement should be interesting to watch.  After all, the industry has had little to no enforcement over the last decade and more.

The following is a fun video from The Daily Show with Elizabeth Warren.  Warren if finally approved by Congress will be a great leader for the Consumer Financial Protection Bureau.