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CFPB News and Updates - 12/21/2012

Consumer Financial Protection Bureau Issues New Proposal on International Remittances
As the Consumer Financial Protection Bureau (CFPB) indicated, the agency proposed revisions to its final rule on December 21, 2012. The rule was set to take effect February 7, 2013, but with these new changes, the agency is proposing to extend the implementation until 90 days after the new final rule is issued.  Click here for the proposal.

As indicated earlier by the agency, the proposal focuses on:

  1. Disclosure of Foreign Taxes and Institution Fees: The proposal would provide increased flexibility and guidance with respect to the disclosure of taxes imposed by a foreign country’s central government as well as fees imposed by a recipient’s institution for receiving a remittance transfer in an account.
  2. Disclosure of Subnational Taxes in Foreign Country: The proposal would require disclosure of foreign taxes imposed by a country’s central government, but would eliminate the requirement to disclose taxes imposed by foreign regional, provincial, state, or other local governments.
  3. Errors from Incorrect Account Information: Under the proposal, when the provider can demonstrate that the consumer provided an incorrect account number and certain other conditions are satisfied, the provider would be required to attempt to recover the funds but would not bear the cost of funds that cannot be recovered.

The CFPB has said that it expects to confine changes to the areas above. However, the Credit Union National Association's (CUNA) efforts with the CFPB to improve the entire international remittance rule, including the current 100 transfers per year exemption level, will continue throughout the new comment period, which will end around late January for most of the proposal; comments will be due near mid-January regarding the delayed effective date.

CUNA will be providing a new Comment Call as well as a revised survey to credit unions in light of the proposal. Also, they are planning a call in early January to discuss the proposal with leagues, Council members and other affiliated credit unions who offer international remittance services.

CFPB Begins Review of the Impact of the CARD Act
As part of its mandate under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) to review the consumer credit card market, the CFPB issued a request for information regarding a number of aspects of the credit card market.  The Bureau is seeking information about how the credit card market is functioning following implementation of the CARD Act.  Specifically, the Bureau seeks comments pertaining to the following:

  • The terms of credit card agreements and the practices of credit card issuers;
  • The effectiveness of disclosure of terms, fees, and other expenses of credit card plans;
  • The adequacy of protections against unfair or deceptive acts or practices relating to credit card plans;
  • Any effect implementation of the CARD Act has had on the cost and availability of credit, particularly with respect to non-prime borrowers;
  • Any impact the CARD Act has had on the safety and soundness of any credit card issuers;
  • Any effect the CARD Act has had on the use of risk-based pricing; and
  • Any effect implementation of the CARD Act has had on credit card product innovation.

The CFPB is accepting public input for 60 days following publication of the request in the Federal Register.  A CUNA survey and Regulatory Comment Call on the proposal will be available shortly on CUNA's Comment Call page.

CFPB Plans to Share Information with State Banking Regulators
Recently, the CFPB issued a Statement of Intent for sharing information with state banking regulators.  While the statement relates primarily to nonbank entities under the CFPB’s direct jurisdiction, it is important to remember that the CFPB has entered into multiple memoranda of understandings with most every state.  According to the Conference of State Bank Supervisor’s Web site, as of April, 2012, all states except New Mexico have adopted the Memorandum of Understanding (MOU) executed in 2011 which allows for the sharing of information between the CFPB and various state banking regulators.  This most recent Statement of Intent is designed to supplement the MOUs and details the types of information the CFPB may share as well as the cooperative actions it intends to take.  The Statement also provides details on how consumer complaint information will be shared and disposed of between the CFPB and state banking regulators.  CUNA will continue to monitor the CFPB’s activity in the area of information sharing between various financial regulators and the potential impact on credit unions.

CUNA Participates in CFPB Roundtable on the Agency’s Project Catalyst
CUNA Regulatory Advocacy staff participated in a roundtable hosted by the CFPB to discuss the agency’s Project Catalyst.  As reported in a previous Regulatory Advocacy Report, Project Catalyst is a Bureau initiative designed to encourage consumer-friendly innovation and entrepreneurship in markets for consumer financial products and services.  Further, through Project Catalyst, the CFPB intends to: (1) establish firm lines of communication with innovators; (2) understand new and emerging products in the market; and (3) engage with innovators.

The roundtable focused on the Bureau’s recently proposed policy to encourage trial disclosure programs, which was noted in last week’s Regulatory Advocacy Report.  The proposed policy is the Bureau’s first effort pertaining to Project Catalyst.  The roundtable provided CUNA and others an opportunity to discuss with the CFPB specific issues of concern regarding the proposed policy on trial disclosure programs, as well as general issues regarding the process by which the Bureau initiates action items within Project Catalyst.  During the roundtable, CFPB staff clarified that a financial institution, including credit unions, would be permitted to float a trial disclosure program in collaboration with one or more financial institutions or other entities under the proposed policy, which is open for comment until February 15, 2013.  CUNA’s Regulatory Comment Call on the proposal will be available shortly on our Comment Call page.

Chart  on CFPB Rulemakings: Updated 12/21/2012
Credit union representatives now have access to a chart  that highlights various rulemaking projects that are being undertaken by the Consumer Financial Protection Bureau (CFPB). The projects are required by the Dodd-Frank Act. The chart covers topics like Reg Z, Appraisals, Reg B and more.   Click here to view the updated chart.

A CUNA username and password are required to access the chart.



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