The Consumer Financial Protection Bureau: Caveat Vendor
The Consumer Financial Protection Bureau's (CFPB) efforts to rein in credit card and debt refinancing companies for misleading or deceitful marketing have been considered unobjectionable, but recently, its actions have become more controversial, especially as it rolled out new rules governing a borrower's ability to repay a mortgage. Mortgage lenders are concerned about the opacity and complexity of the new rules, and lawmakers recently questioned CFPB Director Richard Cordray about whether the rules might prevent banks from lending to low-income borrowers. Additionally, the CFPB orchestrated a $98 million settlement with Ally Financial for discriminating against minority borrowers, noting that although the company does not collect information on customers' race or ethnicity, such information could be inferred based on their surnames and where they live. There also are concerns about the CFPB's proposed rule to require financial firms to submit plans to ensure staff and suppliers are racially diverse and a plan under consideration to investigate loans to small businesses.
From "The Consumer Financial Protection Bureau: Caveat Vendor"
Economist (02/01/14)
The Consumer Financial Protection Bureau's (CFPB) efforts to rein in credit card and debt refinancing companies for misleading or deceitful marketing have been considered unobjectionable, but recently, its actions have become more controversial, especially as it rolled out new rules governing a borrower's ability to repay a mortgage. Mortgage lenders are concerned about the opacity and complexity of the new rules, and lawmakers recently questioned CFPB Director Richard Cordray about whether the rules might prevent banks from lending to low-income borrowers. Additionally, the CFPB orchestrated a $98 million settlement with Ally Financial for discriminating against minority borrowers, noting that although the company does not collect information on customers' race or ethnicity, such information could be inferred based on their surnames and where they live. There also are concerns about the CFPB's proposed rule to require financial firms to submit plans to ensure staff and suppliers are racially diverse and a plan under consideration to investigate loans to small businesses.
From "The Consumer Financial Protection Bureau: Caveat Vendor"
Economist (02/01/14)
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