The Consumer Financial Protection Bureau’s Consumer Response staff has been reorganized and cut during the past three years—moves that could affect the agency’s handling of consumer complaints that have skyrocketed during the pandemic, the CFPB’s Inspector General said in a report issued last week. The Consumer Response office was moved structurally twice and ended up in the newly created Division of Consumer Education and External Affairs, the IG said, in a report on the management challenges the CFPB faces. “These moves may affect the management of consumer complaints, particularly as the Bureau has redistributed some of Consumer Response’s resources to
Senate Banking Chairman Sherrod Brown (D-Ohio) intends to introduce his “Banking for All Act” again this year. It would allow anyone to set up a free bank account at a bank, credit union or Post Office. The bank account, known as a FedAccount, would serve as a digital wallet and would solve the problem of delivering stimulus payments and tax credits to citizens who do not now have bank accounts.
The Consumer Financial Protection Bureau announced it plans to change a Trump Administration policy and that it will now take enforcement and supervisory actions as a result of abusive acts or practices. It will no longer follow the policy instituted by former Director Kathy Kraninger that significantly narrowed the definition of “abusive acts or practices” and thus avoided enforcement actions under those terms. The new policy will take effect the day it is published in the Federal Register.
The American Bankers Association would like the National Credit Union Administration to extend the comment period on a proposed rule that would allow CUSOs to originate any type of loan that a federal credit union may originate. The current comment period ends on March 29 and the ABA wants it extended until May 28.
The vote of the Senate Banking Committee on whether to confirm Rohit Chopra to head the Consumer Financial Protection Bureau was tied at 12-12. The tie vote, under current Senate rules, means that the confirmation can move to the Senate floor. Republicans believe that the CFPB will be “anti-business” under Chopra.
CFPB: Equal Credit Opportunity Act Prohibits Lenders From Sexual Orientation, Gender Identity Discrimination
The Consumer Financial Protection Bureau is issuing an “interpretative rule” that the Equal Credit Opportunity Act prohibits discrimination based on sexual orientation and/or gender identity. As an “interpretative rule” it will not be open for public comment and will become effective when published in the Federal Register. The CFPB then intends to take enforcement actions if the rule is violated.
Financial services trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, are concerned that the Paycheck Protection Program will expire on March 31 with thousands of loans stuck with “holds” that will prevent those small businesses from getting assistance. They want all loan applications received by the March 31 expiration date of the PPP to be processed.
Republican senators this week introduced legislation that would prohibit large banks and credit unions from refusing to provide banking services to legal businesses. It is an attempt to prevent the Biden Administration from restarting Operation Choke Point, an Obama Administration project that was intended to hold financial institutions accountable for processing known fraudulent transactions. Republicans worry that approach would allow banks to avoid providing services to gun-related businesses and other controversial business ventures.
In a letter to National Credit Union Administration Chairman Todd Harper, Sen. Pat Toomey, the ranking Republican on the Senate Banking Committee, said that the Modern Examination and Risk Identification Tool (MERIT) should be used for examinations as soon as possible, even if the training for it is done virtually.
National Credit Union Administration board members Rodney Hood and Kyle Hauptman want to make it easier for organizations to start credit unions.