Key members of the CFPB’s enforcement, regulatory and supervision offices spoke yesterday at PLI’s 20th Annual Consumer Financial Services Institute in Chicago. As was the case during the New York City version which took place on April 6, the session addressed recent developments and upcoming initiatives at the CFPB, and took the form of a Q&A between the moderator and a panel of practitioners and CFPB personnel. My partner, Joel Tasca blogged about the New York City version on April 7.

The panelists from the CFPB included Anthony Alexis, Assistant Director of Enforcement; Diane E. Thompson, Managing Counsel, Office of Regulations; and Peggy L. Twohig, Assistant Director for Nonbank Supervision, Office of Supervision Policy. I co-chaired the program, and acted as moderator of the CFPB session. As was the case in New York City, my partner, Chris Willis, was a panelist for the CFPB session.

During this rare opportunity to directly question key members of the CFPB, several noteworthy items were discussed, including the following:

• Section 1057 of Dodd-Frank contains a whistleblower provision which encourages employees (both present and former) and other third parties to disclose to the CFPB possible violations of law and protects such persons from retaliation by the company about whom the persons have reported. Unlike the whistleblower provision in Dodd-Frank which relates to the SEC, there is no bounty provision. Tony Alexis reported that the Bureau has received leads from whistleblowers that have resulted in investigations by the CFPB.
• The larger participant rule covering the non-bank auto finance industry is likely to be issued “by the end of the summer”.
• It was reported that the next non-bank industry that may be subject to a larger participant rule is installment lending.
• Diane Thompson stated that it had not yet been decided whether the Bureau will initiate a rule making with respect to arbitration now that the Bureau has issued its Arbitration Study. While the Bureau claims that it has not prejudged whether there should be a rule making and, if so, what it should contain, I stated that the press release and Director Cordray’s remarks at the field hearing certainly lead most people to believe that there will be a rule making in the future even though the Study itself supports the industry position that arbitration is in the public interest.
• While Diane Thompson wouldn’t speculate about what areas will be covered in the Bureau’s debt collection rule, she indicated that the public will get at least a rough idea of what the Bureau is considering when it issues a paper as part of the SBREFA process (which will begin later this year). Chris Willis then described the following as areas which he believes will be part of the debt collection rule: contact frequency; the use of email/text/social media communications; voice messages; and the sharing of dispute and do-not-call information between a creditor and its collection vendors. Peggy Twohig then said that debt collectors should not wait for the rule before doing the things that Chris mentioned regarding the sharing of dispute and do-not-call information.
• As he did in New York City, Tony Alexis explained why the Bureau has opted to file lawsuits in court rather than to initiate administrative proceedings – namely, the ability to conduct more thorough discovery in court.
• The SBREFA process for debt collection rulemaking will be commenced in approximately 4-5 months, which suggests to us that proposed rules may be released toward the end of 2015 or early 2016.
• Someone in the audience complained that often the press releases issued when a company enters into a consent order often inaccurately describe the consent order. Tony Alexis said that the enforcement lawyers don’t draft or review press releases.