The Consumer Financial Protection Bureau (CFPB) has a very full agenda planned for 2015. Here are 10 issues the CFPB is working on, starting with areas the bureau definitely is focusing on and moving on to more uncharted—and controversial—territory.
1. TILA-RESPA disclosures
The Dodd-Frank Act mandated the CFPB integrate requirements under the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) into coordinated disclosures.
In November 2013, the bureau finalized its regulations creating new loan estimate and closing disclosure forms, effective Aug. 1, 2015.
Consider these cautions about the new regulations:
•Don’t expect the bureau to postpone the effective date. The bureau said it provided a 21-month implementation period—longer than customary—because it understood the compliance difficulties (“CFPB proposes TILA-RESPA changes,” p. 42).
And you can’t comply early. The CFPB won’t provide a “transition” period because it wants to allow consumers to “comparison shop” among mortgage lenders.
•Recognize these changes require much more than merely updating forms. You’ll need to make significant data processing changes. Press all your vendors to make sure they’re on track, too. Tell the bureau or CUNA if you have concerns about your vendors meeting deadlines, because you will need plenty of time to test systems and train staff.
•Understand that your credit union will have to run old and new systems simultaneously.
Any loan application received by July 31, 2015, will be processed with current forms, and any application received on or after Aug. 1, 2015, will have to comply with the new requirements.
Moreover, the new TILA-RESPA rule covers most, but not all, closed-end consumer loans secured by real property. You’ll continue to administer reverse mortgages and mobile home loans using current forms and procedures.
CUNA continues to ask the bureau to provide much-needed clarifications in these new regulations.
2. Annual privacy notices
CUNA has long pressed Congress and the CFPB to stop requiring credit unions to provide annual privacy notices in paper form. In October, the CFPB adopted a new rule—effective immediately—allowing financial institutions to post privacy notices online if they comply with certain conditions. Generally, to be eligible, a credit union:
•Cannot have changed its privacy information since delivering the most recent paper notice.
•Cannot share information in ways that trigger the member’s opt-out rights.
•Must use the model privacy form.
•Must allow a consumer to review the online privacy notice without logging in.
•Must annually inform members—through billing statements or other communication—of the availability of notices online, and that they can obtain paper copies by calling a specific telephone number.
Credit unions don’t have to switch to online delivery, and may continue mailing annual privacy notices.
3. Prepaid cards
In mid-November, the CFPB issued a proposed rule on general purpose reloadable (GPR) cards. The proposal would cover traditional plastic prepaid cards, as well as mobile and other electronic prepaid accounts that can store funds.
Prepaid card issuers would be required to limit consumers’ losses when funds are stolen or cards are lost, investigate and resolve errors, provide easy and free access to account information, and adhere to provisions in Reg E and the CARD Act, if a credit product is offered in connection with a prepaid account.
Also, new, standardized “Know Before You Owe” disclosures would be required to provide consumers with up-front information about the costs and risks of prepaid products.
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