CFPB – Page 3 – Federal Financial Analytics

20 12, 2022

FedFin on: CFPB Crafts New-Style, High-Impact Enforcement Construct

Arezou Rafikian2022-12-20T17:22:32-05:00December 20th, 2022|The Vault|

In this report, we provide an in-depth assessment of the CFPB’s unprecedented $3.7 billion settlement earlier today with Wells Fargo (WFC). In its release, the Bureau notes that it worked with the FRB and OCC to craft this consent agreement; in his remarks, Director Chopra makes it clear that, settled or not, he wants to penalize a “corporate recidivist” by retaining or even tightening the Fed’s 2018 asset-cap (see Client Report CORPGOV26) and doing the same with the OCC’s 2021 mortgage-servicing settlement….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

19 12, 2022

FedFin on: FSOC Targets Usual Suspects but Also Points to Big-BHC, Nonbank Mortgage Systemic Risk

Arezou Rafikian2023-01-03T15:56:33-05:00December 19th, 2022|The Vault|

As promised, this FedFin report provides an in-depth analysis of FSOC’s 2022 annual report, focusing on findings with near-term policy implications. As always, the report is lengthy and includes many observations and market details that provide insight into Treasury and member-agency-staff thought. Much in it reiterates concerns about short-term funding markets, CCPs, and….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

21 11, 2022

FedFin on: Treasury Plumbs the Depth of Nonbank Finance, Seeks New Merger Policy, Rules

Arezou Rafikian2022-11-22T13:19:47-05:00November 21st, 2022|The Vault|

As promised, this report provides an in-depth analysis of Treasury’s report and resulting recommendations to the President’s Competition Council on the impact of new nonbank consumer-finance entrants from a competition, consumer-protection, and financial-stability perspective. Although the report calls for reconsideration of bank-merger policy with an eye to the growing role of fintechs and bigtechs, its overall view of market power fails in our view to capture the actual landscape in which…

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

21 11, 2022

Karen Petrou: What Will Be Done, Not Just Said, To Fix FTX

Arezou Rafikian2022-11-22T13:18:11-05:00November 21st, 2022|The Vault|

The only question left unanswered about FTX is whether it was a purposeful scam as more than a few clients conclude or a case of implacable forces ending the era of easy money that just got the better of another wunderkind whose awesome skills turned out to be largely confined to costumery conveying inspired innovation to all too many vulnerable investors and gullible politicians. No matter which it is or even – as I think – if it’s a bit of both, FTX is a debacle that will change U.S. financial policy for the better unless FTX drives still more crypto chaos that then spills over to core financial infrastructure and intermediation. I’ve gotten a lot of questions about crypto policy after my brief discussion in last week’s talk on the midterm’s policy impact. Here, more on both the legislative outlook and what regulators may finally bring themselves to do even if Congress can’t get itself together any better next year than in so many before it.

First more on why stablecoins are the cryptoasset most likely to come under a new federal gun. This isn’t because they deserve it more than any other cryptoasset – although they might – but because policy thinking about what to do with stablecoins is most advanced and, thus, bipartisan negotiations in the House are closest to the finish line.

That said, even stablecoin standards aren’t going to be easy. The clearest articulation of how new law might work is S. 4356, the Lummis-Gillibrand …

7 11, 2022

Karen Petrou: The Data-Rights Dilemma: The Balance Between CFPB Despotism and Democracy

Arezou Rafikian2022-11-07T12:17:49-05:00November 7th, 2022|The Vault|

Last week, I despaired of CFPB edicts because I disapprove on principle of despotism no matter how well intentioned. But, as shown in our in-depth analysis of the CFPB’s request for views on consumer data rights, democratic process can also be disastrous. In what purports to be an “outline” of 71 pages and 149 questions often including numerous substantive sub-questions, the Bureau has gone back to its old habit of 1,000-plus page rules sure to do far, far more for lawyers than consumers seeking to better control their own financial destinies.

The outline and Director Chopra’s statements thereon lay out a powerful, persuasive argument about the benefits of data portability to an innovative, competitive, and inclusive retail financial system. I get it, but after that, I’m at a loss.

Here are just a few questions we couldn’t answer about whether the CFPB’s new standards will do what the Bureau wants or heighten consumer exposure to still more cyber, privacy, and financial risk:

Will the third parties gaining control of our account data be covered by new security standards and, if so, will these be enforceable? Will the data third parties gain via whatever authorization process the Bureau demands be deployed not just to answer our questions, but also to empower the already awesome network effects at the biggest quasi-financial companies wholly outside the reach of cross-selling and conflict-of-interest restrictions? Will the products that third parties and their partners select based on our data do us good or ill? For …

4 11, 2022

FedFin: Consumer Data Rights

Arezou Rafikian2022-11-04T15:47:45-04:00November 4th, 2022|The Vault|

Beginning a long-awaited rulemaking process on the extent to which consumers have rights to their own data and how these rights may be exercised, the CFPB is seeking views on an array of ideas and questions to guide future action. This outline is essentially an advance notice of proposed rulemaking (ANPR) in which the Bureau outlines its initial thinking on key questions such as the extent to which screen-scraping should be allowed, whether new security standards are needed, and when consumers are at risk…

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

31 10, 2022

FedFin on: “Surprise” Fee Restrictions

Arezou Rafikian2022-11-01T16:55:42-04:00October 31st, 2022|The Vault|

In conjunction with a Presidential speech and new White House initiative against “junk fees,” the CFPB has accelerated its own efforts in this arena with two new policy directives. As with many other recent Bureau actions, the new circular and bulletin do not take the form of notice-and-comment rulemakings, but rather are directives with express enforcement implications unless or until the courts overturn them, the General Accounting Office intervenes to bar guidance outside the rulemaking process as it did years ago related to inter-agency leveraged-loan standards, or new law reconfigures the agency. The most immediate implication of these edicts is a ban on blanket rejected deposit fees and further constraints on overdraft fees.

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

31 10, 2022

Karen Petrou: The Moral Dilemma of CFPB Dictate

Arezou Rafikian2022-11-01T16:56:49-04:00October 31st, 2022|The Vault|

There is little question that electoral politics powered the President’s launch last week of a new Administration “junk-fee” campaign. How most of these fees matter to the majority of households fuming as they can’t handle prices at the food store and fuel pump is yet to be seen, but politics is only part of the reason for the CFPB’s high-priority blitz against “surprise” fees. Politics is easily understood, if not practiced to maximum advantage. Regulatory actions founded on moral philosophy are not only a compliance conundrum, but also an intellectual quandary.

Question for today’s class: is it right for Rohit Chopra to set rules regardless of the niceties of the rulemaking process when he believes certain acts or practices violate the natural rights of the U.S. citizenry? This may seem a hyperbolic description of the CFPB’s spate of enforceable pronouncements, but it’s the way I read many of them.

Take for example the latest edict on overdraft fees. As FedFin’s in-depth analysis will detail later today, the CFPB’s circular details a raft of laws and rules governing overdraft fees, going on to say how nice they all were but how little they matter anymore.

Because technological delivery can, the CFPB says, obscure fund availability, the Bureau concludes that fees which comply with every provision of each applicable law and rule are still unfair, deceptive, and/or abusive. Disclosures that comply with every provision in each law and rule also no longer suffice, the Bureau believes, and thus depository institutions have an …

19 10, 2022

FedFin on: USB/MUFG Orders Point to New Merger, Regulatory Policy

Arezou Rafikian2022-10-19T10:27:40-04:00October 19th, 2022|The Vault|

As promised, this analysis focuses on the OCC and FRB approvals of the acquisition by U.S. Bancorp of MUFG’s Union Bank in California. Derided in a tweet from Sen. Warren (D-MA) as another “rubber-stamp” approval, both the nature of the transaction – which included massive commitments to community support – and the approvals themselves suggest otherwise. We shall continue to evaluate agency action on larger transactions and shortly provide clients with an analysis of the FDIC/FRB advance notice of proposed rulemaking on new resolution standards approved for public comment by the FDIC (see Client Report DEPOSITINSURANCE115). However, while policy and politics formulate new standards, pending….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

17 08, 2022

FedFin on: Data-Safeguard Legal/Reputational Risk

Arezou Rafikian2023-01-04T11:55:58-05:00August 17th, 2022|The Vault|

Using another of its tools to set policy without prior public comment, the CFPB has released a circular stating that inadequate consumer-data safeguards may constitute a breach of the unfair, deceptive, or abusive acts or practices (UDAAP) protection standards subject to Bureau enforcement action. This is the case even if no consumers have been harmed, if only one consumer is adversely affected, …

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…