WASHINGTON—Richard Cordray, director of the Consumer Financial Protection Bureau, told the House Committee on Financial Services that its early focus on mortgage abuse continues, but that it is also moving on to other initiatives.
In its semi-annual report to Congress, Cordray said the steps it has taken, including its Ability-to-Repay rule (Qualified Mortgage) have put “guardrails in place to prevent the kind of sloppy and irresponsible underwriting that had precipitated the crisis. Our mortgage servicing rules offered new and stronger protections to homeowners facing foreclosure. And our other rules addressed significant problems in the mortgage market deemed in need of repair.”
Cordray said the Bureau is it now “setting the stage” to “provide further latitude for residential mortgage lending by small creditors such as community banks and credit unions.” That has included, Cordray said, efforts to expand the definition of “small creditor” and “rural area.” Comment on both of those proposals is open through March 30.
In his written statement, updated Congress efforts to:
- Clarify some of the new consumer protections while providing federally insured institutions more time to allow for more accurate disclosures in certain cases.
- Overhaul the reporting requirements for the Home Mortgage Disclosure Act. It includes a proposed exemption of approximately 25% of banks and credit unions that are currently required to submit HMDA reports from the obligation to do so.
- Release new and improved tools to allow the public to access and utilize this data more readily and effectively.
- Finalize a rule to promote more effective annual privacy disclosures from financial institutions to their customers. “The approach we took considerably eases the burdens of such notices for many companies. We estimate that the industry could save about $17 million annually if the new online disclosure method is widely adopted,” Cordray said.
Cordray said the CFPB has also:
- Through enforcement actions, helped secure more than $5.3 billion in relief to more than 15-million consumers who fell victim to various violations of federal consumer financial laws.
- Brought enforcement actions that secured $1.6 billion in relief for consumers. Those actions included $727 million in relief to consumers who were harmed by a company’s deceptive marketing of credit card add-on products. They included $92 million in debt relief for 17,000 servicemembers and other consumers who were harmed by a predatory lending scheme. And that included $225 million in relief for consumers who were harmed by other deceptive and discriminatory credit card practices, he said.
- Filed filed suit to hold a company accountable for operating a debt collection lawsuit mill that intimidated consumers with deceptive court filings, totaling more than 350,000 lawsuits in four years in Georgia alone.
- Continued to build out our risk-based supervision program both for banks and for non-bank financial firms. “That approach is enabling us to provide more consistent treatment that ensures compliance with federal consumer financial laws and helps level the playing field among competing firms in mortgage origination, mortgage servicing, debt collection, student loan servicing, and other markets,” Cordray said.
Since opening its doors, Cordray said the CFPB’s Office of Consumer Response has accepted more than 540,000 consumer complaints related to a variety of financial products and services, including mortgages, credit cards, student loans, auto loans, credit reporting, debt collection, and a number of other consumer financial products or services. He said CFPB also continues to promote informed financial decision-making, including the development of educational tools for consumers, such as the Your Money, Your Goals toolkit.
“We are also about to embark on a financial coaching program for transitioning veterans and economically vulnerable populations of consumers in 60 locations all over the country,” said Cordray.