1. [CFPB] orders provide detailed guidance for compliance officers across the marketplace about how they should regard similar practices at their own institutions. If the same problems exist in their day-to-day operations, they should look closely at their processes and clean up whatever is not being handled appropriately. Indeed, it would be “compliance malpractice” for executives not to take careful bearings from the contents of these orders about how to comply with the law and treat consumers fairly.
Richard Cordray, CFPB Director, March 9, 2016, Remarks Before the Consumer Bankers Association

2. The Wages of “Sin…”
EZCORP - $10 Million for “field visits”, multiple ACH attempts, and false threats
TitleMax - $9 Million for “field visits” and use of an “payback guide”
Five Arizona Title Lenders - Sued for advertisements that discussed “rates” by not Annual Percentage Rates or APRs
LendUp – Google-backed lender sued for charging illegal fees, miscalculating interest rates, and failing to furnish payment data to credit bureaus despite promising to do so

3. But the ”gift” of the D.C. Circuit is…
PHH Corporation
CFPB declared “unconstitutional”
Required to adopt a statute of limitations
Cannot apply new interpretations of law retroactively
What the case does not mean…
More challenges to come…

4. Increased Reliance on rulemaking
Debt Collection
“Debt collectors” only—for now
Limits on communications
Limits on collecting time-barred debt
Extensive requirements on how debt is sold or transferred

5. MLA Check NEW DEPARTMENT OF DEFENSE (DOD) REGULATIONS
Service members and their families are protected on certain credit products
Requires lenders determine whether or not they are a “covered borrower”
DoD created a database of active duty service members
Compliance required by October 3, 2016
WHEN IS VERFICATION REQUIRED?
Credit extended (or offered) for personal, family, or household purposes
Finance charge of >36% MAPR or paid in >4 installments

6. VERIFICATION OPTIONS LENDPROTECT MLA Access a DoD online database; or
Use a consumer report from a national consumer reporting agency (CRA)
LENDPROTECT MLA
Simplifies Verification
Copy of the Department of Defense’s MLA Database
Search the applicant’s name and social security number
System will verifies whether or not the applicant is a covered borrower
Offers Flexibility, Ease Of Access
Information may be used independently, or
packaged to leverage the waterfall decision support infrastructure

7. Is your Prepaid card company ready & compliant?
CFPB Rule Change
Last Tuesday, the CFPB released new rules for prepaid cards.
The prepaid card proposal is 1689 pages.
Is your Prepaid card company
ready & compliant?
The proposed CFPB rules will change the way you deal with your customers.
As a retailer, you need to be certain that the prepaid cards you’re selling are compliant with the new requirements.

8. Proposed Changes A “short form” disclosure A “long form” disclosure
Things you need to know
Under the proposed rules, financial institutions must provide:
A “short form” disclosure
A “long form” disclosure
Disclosures must be presented before a consumer acquires a prepaid account.
The disclosures must also clearly list the 4 largest fees – signaling where a company may earn the most revenue.

9. Short Form Disclosure Proposed Example –
Proposed Changes
Things you need to know
Short Form Disclosure Proposed Example –
Prepaid Accounts
Source:
consumerfinance.gov

10. Proposed Changes
Things you need to know
Your prepaid card company must provide you with updated disclosure material, card packaging, and training for new procedures.
Failure to abide by the proposed CFPB rules could result in fines, civil penalties or possibly worse.