The Consumer Financial Protection Bureau ("CFPB") has
concluded its third year. Created under the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the
"Dodd-Frank Act"), the Bureau has taken significant steps
to define its role in the consumer financial services industry and
to establish itself as a major regulatory player. There's
no doubt that as the CFPB has grown, it has had a significant
impact on the consumer financial services industry, by adopting new
industry-shaping regulations, better defining the voice of the
consumer, and exercising supervisory and enforcement authority over
players in the consumer financial services industry. The
proof is in the pudding: banks and nonbanks, in order to meet CFPB
expectations, have increased their focus on the full life cycle of
their products and services, enhanced compliance measures, and
consumer-centric policies.
While there are a lot of drivers for change in the consumer
financial services market, the CFPB's high dollar (and profile)
enforcement actions show the costs of not meeting the CFPB's
expectations. In many cases, the enforcement actions amount
to cash and/or forgiveness to consumers. In addition, as part
of settlements and consent orders, the CFPB has collected civil
money penalties averaging $7 million per action. In one
proceeding, it, in conjunction with the Federal Deposit Insurance
Corporation ("FDIC"), the Board of Governors of the
Federal Reserve System ("Federal Reserve Board"), and the
Office of the Comptroller of the Currency ("OCC")
collected over $27 million in penalties alone. In a more
recent case, the CFPB (and the U.S. Department of Justice, U.S.
Department of Housing and Urban Development ("HUD"), and
various states attorneys general) awarded up to $500 million in
consumer restitution.
According to figures released by the CFPB in reports to Congress
and based off press releases on its website, the CPFB has concluded
approximately 34 enforcement actions since it opened its doors
in July 2011. The CFPB's bases for the enforcement
actions have varied from specific mortgage and housing laws, such
as the Real Estate Settlement Procedures Act ("RESPA"),
the Truth in Lending Act ("TILA"), and the Interstate
Land Sales Full Disclosure Act ("ILSA"), to its general
authority to bring actions against consumer financial services
providers alleged to be engaged in unfair, deceptive, and abusive
acts and practices ("UDAAPs") under the Consumer
Financial Protection Act ("CFPA"). A number of
these proceedings have been referred to the CFPB by other agencies;
the CFPB has brought approximately 11 joint actions with other
government agencies like the U.S. Department of Justice, the OCC,
the FDIC, and numerous states.
In addition to the high costs associated with enforcement
proceedings, the CFPB has reshaped the consumer financial services
marketplace using its rulemaking and supervisory authority.
In the rulemaking context, it has issued final rules in connection with numerous
subjects and statutes, including Truth in Lending (Regulation Z), Integrated Mortgage Disclosures under the Real
Estate Settlement Procedures Act (Regulation X), and the Remittance Transfer Rule (Regulation E).
It has also issued proposed rules in numerous areas, including
additional regulations implementing the Real Estate Settlement Procedures Act (Regulation
X), among others. The Bureau also shook the debt
collection industry when it issued an advanced notice of proposed
rulemaking regarding
debt collection practices in November 2013.
The CFPB supervises depository institutions and credit unions with
total assets of more than $10 billion, and their affiliates. The
Bureau also has authority under the Dodd-Frank Act to supervise
nonbanks, regardless of size, in certain specific markets: mortgage
companies (originators, brokers, servicers, and providers of loan
modification or foreclosure relief services); payday lenders; and
private education lenders. The CFPB may also supervise the
"larger participants" in other nonbank markets as the
Bureau defines by rule, including entities engaged in consumer
reporting, consumer debt collection, and student loan servicing.
Under its supervisory authority, the CFPB anticipates that it
will engage in 150 exams in 2014 (including full scope-reviews and
follow-up examinations).
Below is a quick rundown of notable facts and statistics about the
CFPB's growth and impact over the last three years:
CFPB Resources
- Number of employees as of July 18, 2011: 4521
- Number of employees by the end of 2011: 7502
- Number of employees as of March 2014: 1,362 (and growing)3
- CFPB's Estimated Budget for 2014 Fiscal Year: $497 million4
CFPB Activity
- Number of final rules issued to date: 56
- Number of Consumer Complaints Received as of July 2014: 400,0005
- Number of banks and credit unions under the CFPB's supervisory authority as of June 2014: 1426
- Number of exams planned for 2014: 1507
- Number of public enforcement actions in 2011: 0
- Number of public settlements/final judgments to date: 348
- Number of joint settlements/final judgments to date: 119
Penalties / Consumer Relief Obtained
- Amount of penalties ordered to be paid in enforcement actions (total): $150 million10
- Highest civil money penalty ordered to date: $27.5 million
- Amount ordered to be returned to consumers: $4.6 billion (more than half of which is mortgage servicing related).11
For more information about this and related industry topics, see www.venable.com/cfpb/publications.
Footnotes
1 Based on the "confirmed" number of employees in
a report issued by the CFPB in July 2011. See
Consumer Fin. Protection Bur, Building the CFPB (July 18, 2011), http://files.consumerfinance.gov/f/2011/07/Report_BuildingTheCfpb1.pdf.
2 See Consumer Fin. Protection Bur., Semi-Annual Report
of The Consumer Financial Protection Bureau 6 (Jan. 30, 2012), http://files.consumerfinance.gov/f/2012/01/Congressional_Report_Jan2012.pdf.
3 See Consumer Fin. Protection Bur., Semi-Annual Report
of The Consumer Financial Protection Bureau 12 (May 28, 2014), http://files.consumerfinance.gov/f/201405_cfpb_semi-annual-report.pdf.
4 See Consumer Fin. Protection Bur., The CFPB Strategic
Plan, Budget, and Performance Plan and Report (Apr. 2013), http://files.consumerfinance.gov/f/strategic-plan-budget-and-performance-plan-and-report-FY2012-14.pdf.
5 See Consumer Fin. Protection Bur., Consumer Financial
Protection Bureau: By the Numbers (July 21, 2014), http://files.consumerfinance.gov/f/201407_cfpb_factsheet_by-the-numbers.pdf.
6 See Consumer Fin. Protection Bur., Consumer Financial
Protection Bureau: By the Numbers (July 21, 2014), http://files.consumerfinance.gov/f/201407_cfpb_factsheet_by-the-numbers.pdf.
7 See Consumer Fin. Protection Bur., Supervisory
Highlights, Spring 2014, http://files.consumerfinance.gov/f/201405_cfpb_supervisory-highlights-spring-2014.pdf.
8 At least 5 enforcement proceedings are currently pending.
Enforcement proceedings have included proceedings involving
credit cards, mortgage servicing, mortgage lending, mortgage
kickbacks and illegal practices, mortgage loan modification scams,
mortgage loan data reporting, auto lending, payday and installment
lending, debt collection, student lending, and illegal
debt-relief services, among others. See Consumer Fin.
Protection Bur., Consumer Financial Protection Bureau: By the
Numbers (July 21, 2014), http://files.consumerfinance.gov/f/201407_cfpb_factsheet_by-the-numbers.pdf.
9The CFPB has brought joint enforcement proceedings with the
Department of Justice ("DOJ"), the Office of the
Comptroller of the Currency ("OCC"), the Federal Deposit
Insurance Corporation ("FDIC"), the Department of Housing
and Urban Development ("HUD"), and numerous states.
10 See Consumer Fin. Protection Bur., Consumer Financial
Protection Bureau: Enforcing Consumer Protection Laws (July 21,
2014), http://files.consumerfinance.gov/f/201407_cfpb_factsheet_supervision-and-enforcement.pdf.
11 See Consumer Fin. Protection Bur., Consumer Financial
Protection Bureau: Enforcing Consumer Protection Laws (July 21,
2014), http://files.consumerfinance.gov/f/201407_cfpb_factsheet_supervision-and-enforcement.pdf.
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