CFPB Financial Report|
The Consumer Financial Protection Bureau (CFPB) issued its Financial Report for Fiscal Year 2012 which is required by the Dodd-Frank Act. The report contains some interesting information about the activity of the CFPB over the past year, as well as remarks within the Management Discussion and Analysis section of the report, aside from the financial aspects. Additionally within the report, the CFPB touts the fact that it received an “unqualified” or “clean” audit opinion from the Government Accountability Office (GAO) for Fiscal Year 2012, and that “Maintaining an unqualified audit opinion on the CFPB’s comparative financial statements for fiscal years 2012 and 2011 is a true testament to the efforts of the CFPB management and staff.” However, upon closer examination, the GAO audit opinion contains the following:
During fiscal year 2012, CFPB made progress, but did not yet complete all actions necessary to fully resolve internal control deficiencies related to CFPB’s documented accounting policies, procedures and information security management that we identified during our prior year audit. During the Credit Union National Association's (CUNA) fiscal year 2012 audit, they identified additional deficiencies in CFPB’s implementation of its policies, procedures, and controls over CFPB’s information security. CUNA does not consider the remaining deficiencies from fiscal year 2011 financial audit, and the deficiencies found during their fiscal year 2012 audit, individually or collectively to constitute material weaknesses or significant deficiencies. Nonetheless, these deficiencies warrant CFPB management’s attention.
Of note, it is interesting that the CFPB’s response to the GAO auditor’s report (Appendix II to the Financial Report linked above) contains no reference to any such internal control deficiencies, nor the CFPB’s efforts in addressing these same items. In light of this comment, and especially in times when information security data breaches such as the recently announced South Carolina State government data breach are so prevalent, CUNA will be following up in coming weeks and months with the CFPB to learn how and to what extent these internal control deficiencies are being addressed and hopefully remedied within the agency.
CFPB & FTC Target Deceptive Mortgage Advertising
The CFPB, along with the Federal Trade Commission (FTC), sent letters to numerous lenders concerning potential violations of the Mortgage Acts and Practices rule, which became effective in August, 2011. The rule addresses claims and statements in mortgage advertising that may be misleading to consumers, and the CFPB and FTC share supervisory authority for enforcement of the rule. The impetus behind the letters was alleged abuse of veterans and older Americans.
The letters were sent based on a random sample of about 800 mortgage ads reviewed by the agencies and included ads for mortgage loans, refinancings and reverse mortgages from ads placed in newspapers, on the Internet, mail solicitations and from consumer complaints submitted to the agencies.
Specifically, the rule prohibits misleading claims concerning government affiliation, interest rates, fees, costs, payments associated with the loan, and the amount of cash or credit available to the consumer. CUNA’s Final Rule Analysis on the Rule is located here. The CFPB advised that they will investigate all instances of potential violations of the Rule, and execute enforcement actions, where appropriate and applicable. For more information on the Rule and the agencies’ joint efforts, click here.