CFPB Settlement With Student Loan Trust Raises Red Flags

From: RealClearEducation

By Andrew Wilford

A settlement between the Consumer Financial Protection Bureau (CFPB) and Donald Uderitz, owner of Vantage Capital Group (VCG), has major implications for students with loan debt. Based on media coverage of the settlement, most casual readers might believe that hundreds of thousands of former students may see their student debt wiped away—all thanks to administrative errors by the trust holding the debt, National Collegiate Student Loan Trusts (NCSLT). Unfortunately, this narrative oversimplifies what appears to be an attempt by the CFPB to provide Uderitz with lucrative responsibilities using extrajudicial means.

Congress in Talks to Provide Regulatory Relief to Smaller Banks: Cohn

From: US News & World Report

By Pete Schroeder

WASHINGTON (Reuters) – A top White House economic adviser said Monday there was “real agreement” in Congress to allowing smaller banks to avoid stricter regulatory scrutiny.

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In particular, he expressed confidence that Congress would ultimately alter the 2010 Dodd-Frank financial reform law to raise the caps that determine which big banks garner tougher scrutiny.

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Zillow falls victim to CFPB’s latest witch hunt

From: Washington Examiner

by Cameron DeSanti

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Over the past several years, the CFPB has used anti-kickback laws in the Real Estate Settlement Procedures Act (RESPA) to slap companies with multi-million dollar fines for engaging in historically-common business practices. The CFPB regularly sues mortgage lenders and real estate agencies that have simply partnered in routine marketing service agreements (MSAs), whereby a realtor advertises or recommends a lender or broker.

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Financial Regulation: Perspectives on the Swaps Push-Out Rule

From: GAO

What GAO Found

Since the 1980s, banks have been engaging in swaps: financial contracts (derivatives) in which two parties “swap,” or exchange, payments based on changes in asset prices or other values. A variety of firms (end-users) use swaps to hedge risk, to speculate, or for other purposes. For example, an airline may use swaps to lock in its fuel price to hedge against a future price rise. End-users engage in swaps through swap dealers, and some large banks act as swap dealers, exposing them to risks. Section 716 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)—also known as the “swaps push-out rule”—requires banks registered as swap dealers, in effect, to stop engaging in certain swap activities to remain eligible for federal financial assistance but allows them to “push out” such activities to nonbank affiliates within the same bank holding company (BHC). As originally enacted, section 716 would have covered certain equity, commodity, and credit default swaps activities, but amendments made in 2014 now cover only certain swap activity based on asset-backed securities.

Internal memo on CFPB’s investigation into Wells Fargo fake accounts made public

From: HousingWire

House Financial Services Committee Republicans say CFPB rushed to settle case

Brena Swanson

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The committee’s announcement stated, “The Memorandum shows that the CFPB estimated that the bank was potentially liable for a statutory monetary penalty exceeding $10 billion. This penalty could potentially be increased further, CFPB enforcement attorneys noted, if CFPB determined whether the fraudulent behavior was reckless or knowing, as opposed to negligent, or if the CFPB discovered additional fraudulent behavior not yet reported or violations of other statutes.”

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The Recommendation Memorandum, found here, offers much more information on what Wells Fargo’s penalty should be and what Cordray was advised.