Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 12 posts in FDIC.

Debtor Doral Financial Corp and Its Creditors Seek Declaratory Judgment for Validity of $889 Million Tax Deal With Puerto Rico Secretary of Treasury

Earlier this year, Debtor Doral Financial Corp. had filed a voluntary Chapter 11 bankruptcy petition with the U.S. Bankruptcy Court for the Southern District of New York, Case No. 15-10573, weeks after its wholly owned subsidiary, Doral Bank Puerto Rico, which had a mortgage lending and retail banking business, was closed by regulators and the Federal Deposit Insurance Corporation was appointed as receiver for Doral Bank. Doral Bank’s failure was a result of years of financial losses and economic turmoil and was the largest bank failure since 2010.  Read More ›

New CFPB Guidance on Higher-Priced Mortgage Loan Appraisal Rules under the Truth in Lending Act

On December 12, 2013, six federal financial regulatory agencies (the Federal Reserve, CFPB, FDIC, FHFA, NCUA, and OCC) issued a final rule amending the Dodd-Frank Act appraisal requirements for “higher-risk” mortgages to create exemptions from appraisal requirements for manufactured homes; loans of $25,000 or less (indexed each year for inflation); and certain “streamlined” refinancing transactions.  These exemptions are just in time, as the Higher-Priced Mortgage Loan (or HPML) Appraisal Rules under the Truth in Lending Act take effect on January 18, 2014.    Read More ›

Agencies Address Fair Lending Concerns of Industry and Indicate that ECOA, Ability-to-Repay Rule Compatible

In an October 22, 2013 statement released by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, “the Agencies”), the Agencies addressed the impact of the new Ability-to-Repay Rule, which takes effect in January 2014, on the Equal Credit Opportunity Act (ECOA). Specifically, the Agencies provided guidance regarding whether creditors would be liable under the disparate impact doctrine of ECOA (one of the methods of proving lender discrimination) if the creditors chose to only originate Qualified Mortgages (QMs) under the Ability-to-Repay Rule. As you might suspect, the Agencies indicated that the requirements of the Ability-to-Repay Rule and ECOA are compatible. Read More ›

RBS Reaches $14 Million Settlement With Regulators: Why Preparing for Regulatory Examinations Matters

The OCC and FDIC announced they reached a settlement with two subsidiaries of the RBS Group over allegations of inaccurate or misleading disclosures involving the banks' overdraft protection programs, checking rewards program, and recurring electronic fund transfers. The alleged violations took place between September 2007 and September 2011 and were purportedly discovered  during regulatory examinations, which highlights the importance of conducting regular internal examinations to identify and address any potential issues. Read More ›

FDIC Suit Over MBS Is Time-Barred, Says Federal Judge

On April 22, 2013, Los Angeles-based federal judge Mariana Pfaelzer tossed on timeliness grounds a suit filed by the FDIC, as receiver, against JPMorgan Chase & Co.,  Bank of America Corp., Citigroup Inc. and Deutsche Bank AG.  The suit alleged misrepresentations concerning the credit quality of mortgages backing several RMBS certificates sold to Strategic Capital Bank.  The court concluded that the '33 Act's one-year statute of limitations expired before the FDIC was named receiver, and that the "FDIC does not have the power to revive these expired claims.”   

Another Month, Another CFPB Enforcement Action: American Express Ordered to Refund $85 Million and Pay $27.5 Million in Fines

For the third time in as many months, the CFPB announced the resolution of an enforcement action against a major credit card provider. After reaching settlement with Capital One and Discover, the CFPB set its sights on American Express. Yesterday (10/1/12), the CFPB issued multiple consent orders requiring several American Express companies “to refund an estimated $85 million to approximately 250,000 customers for illegal card practices” and pay a $27.5 million penalty to be split among the CFPB, the FDIC, the Federal Reserve and the OCC. CFPB Director Cordray remarked that the Bureau found that “[s]everal American Express companies violated consumer protection laws and those laws were violated at all stages of the game—from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt.”  Read More ›

The CFPB Strikes Again: Discover To Pay $210 Million Over Phone Marketing

As the CFPB-Lawblog predicted last month, the CFPB’s $210 million settlement agreement with Capital One was a harbinger of more enforcement actions against credit card companies. Late last week, the CFPB announced another $210 million settlement with Discover to resolve charges that its call-center representatives misled consumers into paying for certain “add-on products”—payment protection, credit score tracking, and identity theft protection.  The CFPB claims that the marketing scripts Discover created for its internal and third-party telemarketers “contained material misrepresentations and omissions” that “were likely to mislead reasonable consumers.” The CFPB further alleges that “Discover’s telemarketers also often downplayed key terms and spoke quickly during the part of the call in which the prices and terms of the add-on products were disclosed.”  Capital One’s settlement with the CFPB also involved the marketing of credit card “add-on products.”   Read More ›

Court Grants Preliminary Injunction That Prevents CFPB From Enforcing TILA Rules on Credit Card Fees

A federal district court in First Premier Bank v. U.S. Consumer Financial Protection Bureau (D.S.D.) granted a preliminary injunction to First Premier Bank (“Premier”) to block the CFPB’s enforcement of an amendment to Regulation Z, which would narrow the scope of fees credit card companies can impose on the type of cards typically offered to subprime borrowers. The injunction, based in part on the finding that the Federal Reserve Board (“FRB”) had exceeded its authority, prevents the CFPB from enforcing the amendment until a final decision is made in the case. Read More ›

Senate Committee Approves Cordray to Head Consumer Financial Protection Bureau

The Senate Banking Committee voted 12-10 to approve Richard Cordray’s nomination to be the first director of the CFPB. Cordray is a former Ohio attorney general who currently leads the Bureau’s enforcement division. The committee voted along party lines, with no Republican committee member voting to approve the nomination. Cordray’s nomination now proceeds to the full Senate for a vote. Read More ›

Date Calls for Greater Transparency in Checking Account Fees

On the heels of Bank of America’s announcement that it will impose a monthly fee on debit card users, the Consumer Financial Protection Bureau (“CFPB”) has signaled that it will work toward increasing transparency regarding checking account fees and might require more simplified checking account disclosures. Raj Date, special advisor to the Secretary of the Treasury on the CFPB, recently issued a statement noting that “checking accounts often come with a wide variety of unexpected costs that can quickly add up for consumers.” Read More ›