January 25, 2018

CFPB Chief Mulvaney Says Days of 'Pushing the Envelope' Are Over

The acting head of the U.S. Consumer Financial Protection Bureau pledged to tone down the agency's aggressive regulatory and enforcement stance, a posture that has been decried by many of the companies it oversees.

Writing an op-ed in the Wall Street Journal, Mick Mulvaney said he would continue to make sure the bureau enforces consumer protection laws. But, he added, it will not assume that "the bad guys" are the financial services firms it supervises -- a belief he attributed to the Democrats who had run the CFPB since it was created in 2010.

"The CFPB has a new mission: We will exercise, with humility and prudence, the almost unparalleled power Congress has bestowed on us," Mulvaney wrote. "But we go no further. The days of aggressively 'pushing the envelope' are over."

Named by President Donald Trump in November to lead the bureau until a permanent leader can be nominated and confirmed by the Senate, Mulvaney has moved quickly to shift the agency toward being a kinder and gentler regulator. Earlier this month, he announced that a controversial rule governing payday lenders would be re-written. He also declined to request budget money for the second quarter of 2018, saying the bureau would instead spend down reserves.
Letter from CFPB Director Mick Mulvaney.
January 23, 2018

The CFPB Has Pushed Its Last Envelope. by Mick Mulvaney

Dreher Tomkies LLP

CFPB Expects To Further Delay Prepaid Account Rule's Effective Date

On December 21, 2017, the Consumer Financial Protection Bureau (CFPB) issued a statement providing a status update about its comprehensive final rule amending the implementing regulations for the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z) as applied to prepaid accounts (Final Rule).

The Final Rule extends Regulation E protections to prepaid accounts, thus requiring financial institutions to give consumers easy access to account information, investigate and resolve erroneous charges, and limit consumer liability for unauthorized charges in certain circumstances. In addition, the Final Rule applies Regulation Z protections to prepaid accounts that are linked to credit products. The Final Rule also sets forth certain requirements concerning disclosures and account terms posting and submission. Read more at NATIONAL LAW REVIEW


CFPB signals debt collection rules to come

WASHINGTON (Reuters) - Consumers complain loudly about debt collectors and the industry may need fresh federal regulation to stamp out abuses, the head of the U.S. Consumer Protection Bureau (CFPB) said on Tuesday.

Almost a third of consumer complaints to the CFPB have been tied to debt collectors, and those concerns deserve attention, Mick Mulvaney, President Donald Trump's pick to lead the CFPB, wrote in the Wall Street Journal.

"We will be prioritising," Mulvaney wrote about how debt collection concerns are a persistent area of consumer concern.

Mulvaney is Trump's budget chief but has been leading the CFPB on a temporary basis since late November. Under his leadership, Mulvaney said, industry will have a voice.

"We work for the people. That means everyone: Those who use credit cards and those who provide the credit," he wrote. Read more at REUTERS


Under Trump Appointee, Consumer Protection Agency Seen Helping Payday Lenders

Payday lenders appear to have a powerful friend in Washington.

Former Republican congressman Mick Mulvaney is the interim head of the Consumer Financial Protection Bureau. He was appointed by President Trump amid an ongoing a power struggle for control of the bureau.

Watchdog groups are up in arms because, under Mulvaney, the CFPB has put on hold a rule that would restrict payday lenders and their high-interest-rate loans. The agency has also dropped a lawsuit against online lenders charging 900-percent interest rates. Critics say these moves are payback for campaign contributions to Mulvaney when he was a lawmaker.

Payday lenders say if you need some money fast, they provide a valuable service. And that's how some customers feel too at the Advance America storefront in little a strip mall in Pawtucket, R.I.

One of those customers is auto mechanic Rafael Mercedes (yes, that's his real last name), who says he came to the branch the first time when he needed some parts to fix his own car. "My car broke down and I needed money right then and there," he says.

CFSA Conference

'The fish rots from the head down': Former CFPB chief Cordray fires back at CFPB chief Mulvaney

Richard Cordray, the former head of the Consumer Financial Protection Bureau, lashed out at his successor on Wednesday, calling Mick Mulvaney a "squatter."

Cordray unleashed a battle for leadership of the agency in November when he stepped down and said his chief of staff Leandra English would serve as acting director in his place. Hours later, President Trump appointed Mulvaney, the White House budget director, to the job.

English has sued, arguing that she is the true acting director, but as the case makes it way through the courts, Mulvaney has taken several steps to remake the watchdog agency. In a memo to bureau staffers, Mulvaney pledged this week to tone down the CFPB's regulatory and enforcement efforts.

"It is not appropriate for any government entity to 'push the envelope' when it comes into conflict with our citizens," Mulvaney said in his memo. "The damage that we can do to people could linger for years and cost them their jobs, their savings, and their homes."


CFPB Investigation of World Acceptance Corporation Completed

CFPB recommends no enforcement action

GREENVILLE, S.C.--(BUSINESS WIRE)--World Acceptance Corporation (NASDAQ: WRLD), one of the largest small-loan consumer finance companies in North America, today announced the company received a letter from the Consumer Financial Protection Bureau indicating the investigation into the company's marketing and lending practices has been completed.

More importantly, the CFPB noted it does not intend to recommend enforcement action. As a result, the company is relieved of the document-retention obligations required by the bureau's investigation.

"This is a significant step forward for the company," stated Interim President and CEO Jim Wanserski. "During the investigation, I understand our team fully cooperated with the bureau and responded to every request for information within the specified deadlines.
A_S Management

Major bank anticipates paying a penalty over relationship with Scott Tucker

U.S. Bank expects it will have to pay a penalty related to its banking relationship with recently convicted Leawood payday loan businessman Scott Tucker.

U.S. Bancorp, the publicly traded holding company of Minneapolis-based U.S. Bank, recorded a $608 million liability on its most recent quarterly report, an amount that reflects what it may have to pay to resolve the Tucker issue and other ongoing regulatory compliance matters.

U.S. Bancorp disclosed in a January filing with the Securities and Exchange Commission that its dealings with Tucker were the subject of an investigation by the U.S. Attorney's Office in Manhattan, N.Y. That's the same U.S. Attorney's office that brought racketeering charges against Tucker. He was convicted of those charges Oct. 13.

"That investigation also has covered issues related to the adequacy and effectiveness of U.S. Bank's legacy Bank Secrecy Act/anti-money laundering compliance program," U.S. Bancorp wrote in the SEC filing. Read more at THE KANSAS CITY STAR

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Trump picks tax lawyer as next IRS commissioner, sources say

President Donald Trump will nominate tax lawyer Charles "Chuck" Rettig to head the IRS, multiple sources with knowledge of the White House selection process told POLITICO on Tuesday night.

If confirmed by the Senate, Rettig would join the agency at one of its most challenging times, as it implements a sweeping new tax law with limited resources and faces a possible restructuring by Congress.

Rettig, who's considered a tax controversy specialist, has for more than three decades represented clients before the IRS, the Justice Department, state tax authorities and other jurisdictions. He's with the firm Hochman, Salkin, Rettig, Toscher & Perez PC, which is headquartered in Beverly Hills, Calif. Read more at POLITICO

Financial literacy: Many Americans lack it. by Walt Wojciechowski

The unbanked and underbanked have their reasons for frequently preferring to use cash as opposed to credit cards in their day-to-day purchases. A considerable number of those who don't have bank accounts at all simply don't have enough money to justify setting them up. A less common - but no less important - reason is a (perhaps incorrectly) perceived lack of understanding regarding financial matters. But it isn't just the unbanked and underbanked whose financial literacy may be lacking.

The same can be said for much of the nation's citizens - "banked" or otherwise. When it comes to financial understanding, 33 percent of respondents in a 2017 Equifax poll gave themselves a "C" average. Much of this may be due to a limited initiative to better inform themselves. For example, in the same poll, when participants were asked what they had done to improve their financial literacy over the course of the previous 12 months, close to 40 percent said they hadn't done anything specific. Of those who had consulted educational resources, 45 percent turned to articles from newspapers or online destinations. 22 percent of 15-year-olds weak in financial proficiency.

CFSA Conference

Cincinnati-area lawmaker's name floated to lead Consumer Financial Protection Bureau, report says

COLUMBUS - Republican lawmaker Jonathan Dever emerged as a candidate to lead the U.S. Consumer Financial Protection Bureau - a spot previously held by Ohio Democratic gubernatorial candidate Rich Cordray, according to an American Banker report.

Dever, 45, of Madeira in suburban Cincinnati, is a contender for the position amid skepticism that the White House's first choice, J. Mark McWatters, will get the spot, according to the report.

McWatters, who chairs the National Credit Union Administration, could be considered too close to the industry he would regulate. So other names emerged, including the Ohio lawmaker.
O_Keefe _ O_Malley

Mick Mulvaney's CFPB seems to be going conspicuously soft on payday lenders

On Monday, the Consumer Financial Protection Bureau (CFPB) quietly dropped its four-year-old investigation of World Acceptance Corp., a payday lender in the home state of Mick Mulvaney, the acting CFPB director and White House budget director. World Acceptance Corp., which donated at least $4,500 to Mulvaney's congressional campaigns, announced the CFPB's move in a press release, and the CFPB had no comment for International Business Times.

Last Thursday, without explanation, the CFPB dropped a lawsuit against four payday lenders in Kansas that charge interest rates of up to 950 percent. On Jan. 16, the agency - set up in 2010 to protect consumers - announced its intention to scale back regulations finalized in October by previous CFPB Director Richard Cordray over strong objections from the payday lending industry. The rules are designed to prevent consumers from being saddled with onerous loans by payday lenders, banks, and auto lenders. Read more at THE WEEK

Secure Check Cashing Systems

Acting Director Mulvaney Calls For A More Humble CFPB

Mick Mulvaney - the White House's head of the Office of Budget and Management and the interim director of the CFPB (barring a court ruling that changes that) - has a new mission for the government agency that he is temporarily in charge of.

We know this because he wrote a new mission statement for it - 1,118 words distributed to the bureau's staff yesterday (January 23). The vision outlined within, according to New York Times reporting, is a vision of a CFPB guided by "humility and prudence" and that will no longer "push the envelope" when it comes to jurisdiction and scope.

Mr. Mulvaney also noted that it is not his intention to shutter the bureau, because doing so would be against the law.

"When I arrived at CFPB, I told folks that despite what they might have heard, I had no intention of shutting down the Bureau," Mr. Mulvaney wrote. "Indeed, the law doesn't allow that, and as members of the Executive Branch we are charged with faithfully executing the laws."
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