Infobytes - A Weekly In-depth review of news & developments in the financial services industry - September 7 2012







CFPB Releases Examination Procedures for Consumer Reporting Agencies. On September 5, the CFPB released procedures to guide its staff in examining "larger participant" consumer reporting agencies (CRAs). In July, the CFPB adopted a rule that will allow it to supervise CRAs with more than $7 million in annual receipts from consumer reporting activities starting September 30, 2012. The procedures outline how examiners should assess a CRA's compliance with federal requirements, primarily under the Fair Credit Reporting Act, relating to (i) using and providing accurate consumer information, (ii) handling consumer disputes, (iii) providing disclosures to consumers, and (iv) preventing fraud and identity theft. While the procedures focus on issues specific to consumer reporting, they include a module that directs examiners to consider whether a CRA offers any other consumer financial product or service that creates other risks to consumers, particularly with regard to Gramm-Leach-Bliley privacy requirements and potential unfair, deceptive, or abusive acts or practices (UDAAP violations).

CFPB Extends Comment Period for Finance Charge Definition Proposal. On August 31, the CFPB extended the comment period for aspects of two recently proposed rules. On July 9, the CFPB proposed a rule to merge the TILA and RESPA mortgage loan disclosures. That proposal includes potential changes to the definition of finance charge, comments on which were due September 7, 2012. Having heard from stakeholders that the proposed definition could impact changes proposed in other CFPB mortgage-related rulemakings, the CFPB extended the comment deadline to November 6, 2012, which matches the deadline for most of the other aspects of the proposed TILA/RESPA disclosure rule. This extension does not impact the September 7, 2012 deadline for comments on whether the CFPB should delay implementation of certain new TILA and RESPA disclosures. Also on July 9, 2012, the CFPB proposed a rule to expand the types of mortgage loans subject to HOEPA, with comments due September 7, 2012. Given the extension of the deadline for comments on the definition of finance charge, which will impact the scope of the extended HOEPA coverage, the CFPB also extended the HOEPA proposed rule comment deadline to November 6, 2012.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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