History of the CFPB. It started with professor Elizabeth Warren, who taught and specialized in bankruptcy. Yes, the same Elizabeth Warren who became a US Senator and sought the Democratic nomination for President. She called for the creation of a new independent federal agency to focus on regulating consumer financial products targeted at American households like credit cards and mortgages to name a few.[1] Her goal was to: move away from legal jargon, be more coherent and consumer-oriented, and have financial products reviewed under one (1) single independent agency. Her timing was just right because, in 2010, the subprime mortgage market collapsed, $10 Trillion in household wealth was wiped out, and in that aftermath Obama’s administration asked Congress to establish an agency to ensure consumer protection. [2]
So What is the CFPB? The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) as an independent financial regulator within the Federal Reserve System.[3] It moved 18 existing federal statutes to the CFPB to administer including the Truth-In-Lending Act, Fair Credit Reporting Act, and the Fair Debt Collection Practices Act and vested the CFPB with potent investigative and enforcement powers including seeking restitution, disgorgement, injunctive relief, and civil penalties of up to a $1Million a day! The CFPB pursues unfair, deceptive, or abusive acts or practices; Writes rules; Supervises companies; Enforces laws outlawing consumer finance discrimination; Gives financial education; and Monitors new risks to consumers.[4] In the past 10 years, the CFPB obtained $11 Billion in penalties ($1 Billion from Wells Fargo for charging too much for mortgage interest rate-lock extensions, and adding insurance costs and fees into auto loans).[5]
CFPB is the watchdog for: (1) Mortgage Companies; (2) Credit Reporting; (3) Personal Loans; (4) Debt Collection; (5) Credit Repair Services; (6) Personal Consumer Reports; (7) Credit Cards; (8) Pre-paid Cards; (9) Checking Accounts; (10) Savings Accounts; (11) Vehicle Loans; (12) Leases; (13) Student Loans; (14) Payday loans; (15) Title Loans; (16) Money Transfers; (17) Virtual Currency; (18) Check Cashing; (19) Currency Exchange; (20) Cashier’s/ Traveler’s checks; and (21) Debt Settlement.[6] Complaints can be filed against companies and individuals with CFPB online, and the CFPB can be called at (855) 411-CFPB (2372) for more information.
Is the CFPB a valid Agency or has it been Abolished? On June 29, 2020, the United States Supreme Court decided Seila Law, LLC v. Consumer Financial Protection Bureau, putting the CFPB in the hotseat of whether it would be dismantled. The case revolved around a law firm providing debt-related legal services was issued a subpoena from the CFPB in order to investigate the firm’s business practices, the law firm refused to comply, objecting that the CFPB’s entire existence was unconstitutional as its structure violated the Separation of Powers. The Supremes agreed in part, but offered a resolution to fix the CFPB’s ill-formed structure stating,
“In organizing the CFPB, Congress deviated from the structure of nearly every other independent administrative agency in our history. Instead of placing the agency under the leadership of a board with multiple members, Congress provided that the CFPB would be led by a single Director, who serves for a longer term than the President (i.e. 5 years) and cannot be removed by the President except for inefficiency, neglect, or malfeasance. The CFPB Director has no boss, peers, or voters to report to.” … “Such an agency lacks a foundation in historical practice and clashes with constitutional structure by concentrating power in a unilateral actor insulated from Presidential control. We therefore hold that the structure of the CFPB violates the separation of powers. … The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will.”
Questions answered by the CFPB as it pertains to Real Estate. Remembering that the CFPB is consumer oriented, so it has a wealth of information. The following questions have been answered by the CFPB as common questions that occur in real estate transaction but unfortunately their website is not well organized by topic. I have re-organized them for easy reference as it pertains to obtaining a loan for real estate transactions:
(01) SHOPPING FOR LOANS
(02) INCOME VERIFICATION
- Can a Lender require me to provide W-2’s or Pay Stubs?
- Can a creditor ask whether my or my co-signer’s income comes from alimony, child support, or separate maintenance payments?
- Can a Lender or broker refuse to consider alimony and child support as part of my income?
- Can a Lender or broker refuse to consider my or my co-signer’s part time income or retirement income (e.g. annuity, pension, or other retirement benefit)?
(05) DISCRIMINATION
- A mortgage lender gave me a higher interest rate than I should have gotten based on my creditworthiness. What can I do if I think the lender discriminated against me?
- What constitutes discrimination by a lender or broker if I am borrowing as a business?
- Can a broker or lender consider my age as too young?
- Can a Broker or lender consider my age as too old?
- Can a lender ask about my race, color, religion, national origin or sex?
- Can a lender ask about my marital status?
- Can a lender ask if I am not a citizen?
- Can a lender ask if I am receiving public assistance?
(06) DOCUMENTS I CAN EXPECT
(09) TRID (TILA-RESPA INTEGRATED DISCLOSURE rule)
- After the initial Closing Disclosure is provided, If there are any changes to the disclosed terms, does the creditor have to provide a corrected Closing Disclosure at least 3 business days before the closing?
- What about if the rate (APR) goes down?
- When must the Loan Estimate be provided?
- Can a creditor insist on being provided with more than the six (6) pieces of information before providing a Loan Estimate?
- Can a creditor insist on being provided verifying documents before providing a Loan Estimate?
- Is the requirement to provide a Loan Estimate triggered if the consumer submits the six (6) pieces of information in order to receive a pre-approval or pre-qualification letter?
- Can a creditor require the consumer sign and return the Loan Estimate or Closing Disclosure?
(11) LIMITATION ON FEES, POINTS, AND RECURRING CHARGES
(13) TITLE COMPANIES
(14) RIGHT TO RESCIND MY LOAN APPLICATION
(16) MORTGAGED PROPERTY THAT IS TRANSFERRED AFTER PURCHASE
DISCLAIMER: Not intended to constitute legal advice, accuracy, nor completeness, and may not be relied upon as such; consult an attorney. FTIC is a national award winning title insurance company known for its white glove customer service and “No Junk Fee Guarantee.” ®
[1] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 8
[2] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 8
[3] Seila Law, LLC v. Consumer Financial Protection Bureau Pg. 9
[5] Wells Fargo Hit With $1 Billion In Fines Over Home And Auto Loan Abuses
Pretty! This was an incredibly wonderful post. Thanks for providing these details.
Well I truly enjoyed reading it. This tip provided by you is very helpful for proper planning.
What a material of un-ambiguity and preserveness of valuable knowledge about unexpected emotions.
Hello friends, nice paragraph and pleasant urging commented here, I am really enjoying by these.
I appreciate, cause I found exactly what I was having a look for.
Some really select content on this website , saved to fav.
Thanks a lot for the blog. Really looking forward to read more. Want more.
Thank you for your article post. Really thank you! Want more.
If you would like to increase your familiarity simply keep visiting this website and be updated with the newest news posted here.
Major thanks for the article. Really thank you! Much obliged.
I really liked your article post. Really looking forward to read more. Much obliged.
Excellent post. I will be dealing with many of these issues as well..
Way cool! Some extremely valid points! I appreciate you writing this write-up and the rest of the website is also very good.
Some truly wonderful articles on this internet site , thankyou for contribution.
Hi colleagues, nice piece of writing and pleasant arguments commented at this place, I am genuinely enjoying by these.
Thanks for sharing, this is a fantastic blog article. Really looking forward to read more. Keep writing.
You made a few fine points there. I did a search on the subject and found the majority of persons will go along with with your blog.
I have read so many content about the blogger lovers but this article is genuinely a fastidious post, keep it up.
You have brought up a very excellent points , regards for the post.
This design is steller! You most certainly know how to keep a reader entertained. Tatum Bald Senn
Thank you for the in-depth look into the CFPB. I’ve been around for a while, but one person can’t remember everything! Looking forward to more from you.
Finally, CFPB questions laid out in a way that makes sense! Thank you for taking the time to do this.
Thank you for organizing the questions into sections! Bookmarking this page for sure.
I had no idea that the CFPB started with Elizabeth Warren! Thank you for including the history for people like myself who love that kind of stuff.
As a newbie to real estate, I am constantly looking for articles like this! Thank you for your commitment to explaining real estate and title.
Thank you for your information.
Love this! Great article!
hey there and thank you for your information – I have definitely learned something new.
greatly appreciate your work. i’ve always wondered how the cfpb works.
Hello! Just wanted to say I love reading your blog and look forward to reading your future posts. Carry on the outstanding work!!
I really enjoy reading through your articles.
Hi! I want to say that this article is awesome, it answered all the questions I had about the CFPB. I will definitely bookmark this article and share it with whoever I feel would benefit from reading it. Cheers!
Thanks for the awesome post!
Thanks. I bookmarked this article. Will be helpful to remember.
Hello! Very helpful info in this article!
Hello,
So much valuable information in one article! Thanks for your commitment to title and real estate.
Hmm is anyone else having problems with the images on this
blog loading? I’m trying to figure out if its a problem on my end or if it’s the blog.
Any feed-back would be greatly appreciated.
Hi Wyatt,
Thank you for reaching out to us. I would recommend to restart the computer or close and open the webpage again.
Let us know if you figured out what was the issue.
I read this post fully on the topic of the difference of hottest and previous
technologies, it’s amazing article.
magnificent issues altogether, you simply gained a new reader.
What may you suggest about your post that you simply made a few days in the past?
Any positive?
I think this website has some very fantastic info for everyone : D.
I was suggested this blog by my cousin. I’m not sure whether this
post is written by him as nobody else know such detailed about
my problem. You are wonderful! Thanks!
Appreciate the recommendation. Let me try it out.
These are truly impressive ideas in regarding blogging.
You have touched some nice points here. Any way keep up wrinting.
After checking out a handful of the blog articles on your website, I honestly appreciate
your way of writing a blog. I book marked it to my bookmark site list and will be checking back in the near future.
Please check out my website as well and let me know what you think.
I truly enjoy reading your blog and I look forward to your new updates.
What’s up to all, it’s really a pleasant for me to pay a visit this web site, it contains
valuable Information.