CFPB Structure


In October, a three-judge panel from the U.S. Court of Appeals for the D.C. Circuit ruled in the PHH v. CFPB case that the Consumer Financial Protection Bureau (CFPB) concentrates “enormous executive power” in a director who cannot be removed except “for cause.” A U.S. appellate court has now granted the CFPB’s request to rehear the case, which challenges the constitutionality of its governance structure.

Ruling Against CFPB


A U.S. appellate court ruled against three groups – 17 Democratic state attorneys general, Sen. Sherrod Brown and Rep. Maxine Waters, and a consortium of consumer advocates – appealing a prior ruling that the Consumer Financial Protection Bureau’s (CFPB) single-director structure is unconstitutional. The October ruling of the original case, PHH v. CFPB, found that the Bureau concentrates “enormous executive power” in a director who cannot be removed except “for cause,” making him virtually unaccountable to outside authority.

Neugebauer to CFPB?


The banking industry was atwitter last week with news that Texas’s own Randy Neugebauer was being considered by the Trump administration to run the Consumer Financial Protection Bureau.

Neugebauer, who recently retired from Congress, was a consistent critic of the Bureau’s actions, as well as its single director structure and funding during his time on the House Financial Services Committee.

Comment Letter


Recently, the CFPB made a formal inquiry into the obstacles third parties doing business with customers of financial institutions face when accessing customer financial records. IBAT’s comments on the CFPB request addresses concerns for account security, data security, privacy, user authenticity, consent to disclosure, online banking limitations, Gramm Leach Bliley Act requirements, and Dodd Frank Act requirements that arise when financial services offered by third-party providers depends on access to consumer financi

The CFPB Issues Continue


Despite the fact that there is no data supporting the need to modify the rules in Regulation E relating to payroll cards, which are working quite well, the CFPB amended Regulations E and Z to create consumer protections for prepaid financial products, including payroll cards. The rules also apply to government benefit cards but not to gift cards or health savings account cards.

The rules are effective October 1, 2017, although the requirement to submit account agreements to the CFPB is effective October 1, 2018. Below are the key changes with respect to payroll cards:

Court Rules


This week, the CFPB barely survived a decision handed down by a three-judge panel in PHH Corporation v. Consumer Financial Protection Bureau, the United States Court of Appeals for the District of Columbia. But survive it did. PHH, which had Director Cordray increase a $6.4 million sanction to $109 million upon appeal, sued the agency in 2015 alleging, among other things, that the agency’s structure violates the constitutional separation of powers.

CFPB Issues Final Rule


The CFPB updated its mortgage-servicing rules and expanded foreclosure protections. The final rule provides protections when a mortgage is transferred between servicers. Mortgage servicers must now offer mitigation services more than once if a borrower brings their mortgage current, then again becomes delinquent. The rule provides additional protections to mortgagors who acquired the mortgage, often through death or divorce.


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