June has been a busy month for the Consumer Financial Protection Bureau (“CFPB”) thus far, and institutions should note a number of rules and initiatives that have been set into motion. In case you have missed some of these releases, this article will summarize several key areas that have been active lately:
• Mobile banking – On June 11, 2014, the CFPB issued a Request for Information regarding mobile financial services. The text can be located here. The CFPB is examining how mobile banking improves access to the unbanked, the risks and data breach issues associated with this technology, and the customer services aspects. As consumers rely on applications and mobile access to banking and financial products, these regulations are sure to be far-reaching in scope. Director Cordray also spoke on this topic at a field hearing in New Orleans held in conjunction with releasing the request for information.
• Prepaid Card Rule Delay – Director Cordray testified before the Senate Banking Committee on June 10 and provided the CFPB semi-annual update. Since 2012, the CFPB has examined prepaid cards, and the latest update on the calendar indicates that prepaid card rules will likely be forthcoming by the end of the summer.
• More Mortgage Servicing Settlements – On June 17, the CFPB announced a settlement in connection with federal agency partners and 49 state attorneys general against SunTrust Mortgage, Inc. The settlement requires SunTrust to pay $40 million to 48,000 consumers who lost their homes to foreclosure, as well as $10 million to the federal government, and a penalty of $418 million.
• Kickbacks – The CFPB has cracked down on kickback schemes over the last year, and in the latest example, a relatively small company, Stonebridge Title Services, Inc. agreed to pay $30,000 as settlement for violations of Section 8 of RESPA.
If you have any questions about these updates and how they might impact your institution, please contact Spilman or other knowledgeable counsel.