#UDAAP – Federal Financial Analytics

5 03, 2024

FedFin on: Consumer-Financial Product Marketing Practices

Arezou Rafikian2024-03-05T16:34:22-05:00March 5th, 2024|The Vault|

The CFPB has issued a circular essentially banning digital and perhaps all other consumer-finance comparison-shopping and lead-generation tools for credit cards and other products not covered by prior orders. These activities could continue, but only as long as the comparison or lead is completely objective as the Bureau may come to judge it under complex and sometimes conflicting standards. The circular follows similar CFPB actions outside the Administrative Procedure Act even though the agency clearly intends to enforce its new approach both directly and in concert with other state and federal agencies….

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

6 04, 2023

FedFin: Extra Equitable?

Arezou Rafikian2023-04-06T16:36:29-04:00April 6th, 2023|The Vault|

FHFA, Fannie, and Freddie yesterday updated the sometimes-controversial equitable-finance plans FHFA approved last year. Notably, Fannie’s new plan no longer focuses exclusively on Black households, a feature that garnered vitriolic Wall Street Journal criticism and negative Republican reactions. Freddie’s plan delays and may even back away from efforts to set MI and title insurance pricing.

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

21 12, 2022

FedFin on: Nonbank Enforcement-Order Registry

Arezou Rafikian2022-12-21T16:54:37-05:00December 21st, 2022|The Vault|

The CFPB is proposing to create a public registry of certain enforcement actions that would initially cover nonbanks (including BHCs) with a goal of drawing public and enforcement-agency attention to what the Bureau’s director calls “serial offenders.” …

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

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.…

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.…

1 06, 2022

FedFin: AI Adverse-Action Requirements

Arezou Rafikian2023-02-21T12:52:57-05:00June 1st, 2022|The Vault|

Continuing its use of novel rulings that preclude public notice and comment, the CFPB has issued a landmark ruling on artificial intelligence (AI) and other forms of algorithmic underwriting stipulating lender responsibility for sending out the adverse action notices required under the Equal Credit Opportunity Act (ECOA). The CFPB recently added a broader range of credit decisions on outstanding loans (e.g., granting or reducing lines), to these notice requirements, making the reach of this new policy still broader. Lenders are responsible for adherence to these requirements even if their underwriting models are provided by third parties or credit decisions are made by third parties such as fintechs or auto dealers. However, when these nonbanks are the lender, they are then subject to CFPB enforcement even if the Bureau does not have formal supervisory power over them under another recent CFPB ruling…

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

1 06, 2022

FedFin: How Adverse Is This?

Arezou Rafikian2023-02-21T12:50:01-05:00June 1st, 2022|The Vault|

As detailed in our new in-depth report, the CFPB has issued another sweeping rule by way of a seemingly innocuous circular not subject to public notice and comment. Under it, lenders that use third-party underwriting are responsible for ensuring that borrowers receive thorough adverse action notices even if the lender has no authority over the AI or other complex models determining credit outcome.

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

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27 04, 2022

FedFin on: Nonbank Consumer-Finance Supervision

Arezou Rafikian2023-03-01T15:07:08-05:00April 27th, 2022|The Vault|

Using what it describes as “dormant” authority, the CFPB is seeking comment on a rule setting the procedures under which it expands its authority to nonbank financial companies it believes pose consumer-protection risk. The procedural rule is just what this term implies – one that establishes procedural standards that may change upon finalization – rather than a request for views on the extent to which the CFPB has the authority it claims. Indeed, the Bureau clearly intends to use the authority stipulated in this rule for supervisory interventions even as comment on the procedures has yet to be completed…

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

26 04, 2022

FedFin on: Chopra Stands His Ground on Sweeping Agenda, Administrative Process

Arezou Rafikian2023-03-01T15:52:51-05:00April 26th, 2022|The Vault|

The Senate Banking Committee’s hearing today with CFPB Director Chopra was a sharply partisan session with little immediate impact on what Mr. Chopra plans to do to achieve his sweeping new vision. Although the debate will have little to no impact on bank-merger policy, much of the session focused on the actions Mr. Chopra took in concert with Acting Chairman Gruenberg to wrest FDIC control from former Chair McWilliams and issue an RFI suggesting significant changes to both merger analytics and bank-resolution policy…

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

1 02, 2022

FedFin: “Fair-Fee” Policy

Arezou Rafikian2023-04-05T14:22:57-04:00February 1st, 2022|The Vault|

Taking action to advance President Biden’s competition order, 1 the CFPB is seeking views on fees which it believes exploit consumers by virtue of unfair competition. Although many of the fees it cites are covered by statutory
disclosure regimes designed to ensure both front- and back-end fee transparency, the Bureau believes that many of these fees are unfair due to large-bank market power.

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