Tag Archive | "Consumer Financial Protection Bureau"

Compliance Experts to Dealers: Heed CFPB’s Aggressiveness


Crystal Lake, Ill. — Automotive Compliance Consultants, a group of automotive retail compliance experts, cautions auto dealers to heed the aggressiveness of the Consumer Financial Protection Bureau (CFPB) in its indirect, but very real review of automobile dealership financing practices.

“Whether dealers like it or not, the CFPB is looking at and analyzing all financial practices and compliance with financial regulations by indirectly looking into those entities under CFPB’s jurisdiction that transact business with the retail automotive industry,” said David Missimer, general counsel for Automotive Compliance Consultants.

Terry Dortch, the firm’s CEO, who last week participated in the American Financial Services Association’s (AFSA) 30th Independents Conference & Exposition in Las Vegas, said Automotive Compliance Consultants joined the AFSA to engage with its members and committees to be at the forefront of an ever-changing financial landscape.

“The CFPB has made recent bold moves that are affecting how auto dealerships finance customers, as it is apparent that auto dealers, though technically not under the CFPB’s umbrella, are being targeted by the CFPB to pressure their lenders to modify their lending practices,” Dortch said.

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CFPB Opens Consumer Complaint Database to the Public


Washington — The Consumer Financial Protection Bureau (CFPB) launched the nation’s largest public database of federal consumer financial complaints, opening up to the public more than 90,000 individual complaints related to financial products and services.

The launch expands the Consumer Complaint Database significantly from about 19,000 credit card complaints to more than 90,000 complaints on mortgages, student loans, bank accounts and services, other consumer loans and credit cards.

“By sharing these complaints with the public, we are creating greater transparency in consumer financial products and services,” CFPB Director Richard Cordray said at a field hearing in Des Moines, Iowa, to announce the expansion of the bureau’s complaint database. “The database is good for consumers and it is also good for honest businesses. We believe the marketplace of ideas can do great things with this data.”

The database allows the public to see what consumers complained about and why, as well as how and when the company in question responds. It has more than one million data points, covering approximately 450 companies. It includes the type of complaint, the date of submission, the consumer’s ZIP code, and the company that the complaint concerns.

The database also includes information about the actions taken on a complaint by those companies — whether the company’s response was timely, how the company responded, and whether the consumer disputed the company’s response. A consumer’s identity and other personal information are not included in the data.

The database allows users to easily track, sort, search and download information. The data also is available via API (application programming interface), which allows developers to build applications, conduct analyses and perform research. Consumers can build their own visualizations, charts and graphs. The data also can be embedded on other websites and shared through social media.

The live database updates daily. So, as the CFPB handles more complaints, more will be added. When the CFPB accepts consumer complaints about other financial products and services, they will be put on the database after a period of time. Complaints are listed in the database only after the company responds to the complaint or after they have had the complaint for 15 days, whichever comes first.

While the allegations in the complaint are not verified, a commercial relationship between the consumer and the company is substantiated before the complaint is added to the database.

Consumers are given the option to review and dispute company responses. The CFPB then reviews that feedback. The CFPB also indicated it will use the database along with other information, such as the timeliness of the company’s response, in a variety of ways, including aiding the bureau to prioritize complaints for investigation.

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Obama Nominates Former Ohio AG to Lead New Bureau


WASHINGTON — President Obama has named former Ohio Attorney General Richard Cordray as his nomination for director of the new Consumer Financial Protection Bureau (CFPB), which was created by the passage of the Dodd Frank Act last year. The nomination will require Senate confirmation, which, by all account, will be a problem.

Cordray previously served as Ohio’s treasurer and as head of the CFPB’s enforcement division for the last six months under current interim director and agency architect Elizabeth Warren.

During the announcement, President Obama discussed Dodd-Frank’s provisions, which included making taxpayer-funded bailouts illegal, Wall Street reforms and stronger consumer protection rules.

“Already, the agency is starting to do a whole bunch of things that are going to be important for consumers — making sure loan contracts and credit card terms are simpler and written in plain English,” the president said. “Already, thanks to the leadership of the bureau, we’re seeing men and women in uniform who are getting more protections against fraud and deception when it comes to financial practices.”

In her White House blog post announcing the nomination, Warren described Cordray as someone that would be a “strong leader” for the CFPB. She added that he is someone with “a proven track record of fighting for families during his time as head of the CFPB enforcement division, as attorney general of Ohio and throughout his career.”

“He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear he can make many important contributions in leading it,” Warren continued in her blog post. “Rich is smart, he is tough and he will make a stellar director. I am very pleased for him and very pleased for the CFPB.”

In this month’s Legal column, Tom Hudson, partner at the law firm of Hudson Cook LLP, talked about the many challenges the CFPB is facing as it gets set to assume regulatory authority on July 21. The Republican-controlled Senate has already said it will block President Obama’s nomination. Republican lawmakers also have introduced several proposals to reduce the bureau’s power and independence.

Because of efforts put forth by the National Automobile Dealers Association, dealers were largely excluded from the CFPB’s oversight. However, the Dodd-Frank Act granted the FTC new rulemaking powers as it pertains to dealers. The agency is now hosting a series of roundtables to determine where it should focus its attention when it assumes its new powers. The next roundtable is scheduled for Aug. 2-3 at St. Mary’s University School of Law.

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