A small summery regarding Financial Reform

2. Consumer Financial Protection
Bureau
• Consumer Financial Protection
Bureau (not Agency)
• Primary policy argument is the failure
of existing federal agencies to protect
consumer
• Strips federally-chartered institutions
of a significant degree of charter
preemption authority

3. Functional Units Required to be
Established – a Very Large Potential
Bureaucracy

4. The Transfer Date – July
21,2011• Recently Announced by the
Treasury
• 75 Fed. Reg. 57253
(September 20,2010)
• Numerous Functions and
Authorities Effective as of the
Transfer Date
• In the Meantime – Treasury is in
Charge

5. - To be funded with civil money penalties
- May be an incentive to bring CMP actions

6. Coverage
• Broad authority to examine and supervise a “covered person”
engaged in a “financial activity” in connection with a consumer
financial product or service
- Banks below $10 billion exempted from direct CFPB jurisdiction to
examine and supervise
- Other significant exemptions provided by statute
• Unlike other federal statutes that focus on charter form,
jurisdiction for the CFPB is based upon product or activity

7. Coverage (continued)
• Covered persons include the following:
- Banks, Thrifts and Credit Union
- Mortgage loan originators, services and brokers
- Real Estate settlement companies, appraisers, appraisal
management companies
- Debt Collectors
- Debt settlement and management services
- Credit Counselors
- Some scallywags as well
• A covered person also includes “related
persons” –
- Officers and Directors
- Management and Employees
- Joint Venture Partners
- Independent contractors – who knowingly or recklessly participate
in violations or breaches of duty, and includes
• Attorneys
• Appraisers
• Accountants
• A covered person also includes “service providers”

8. What Authority is Provided?
― Alternative Mortgage Transaction Act
― Equal Opportunity Act
― Fair Credit Billing Act
― Fair Credit Reporting Act (with exception
for sections 615€ and 628
― Fair Debt Collection Practices Act
― Gramm-Leach-Bliliey Act , Privacy Sections,
502-509
― Home Mortgage Disclosure Act
― Home Ownership and Equity Procedures Act
― Real Estate Settlement Procedures Act
― S.A.F.E. Mortgage Licensing Act
― Truth-in-Lending Act

9. What Authority is Provided…Continued…
• Monitoring and data gathering authority
• “Super” disclosure authority to prescribe
rules to ensure that a consumer financial
product is fully and completely described to
a consumer
• Examination, supervision and enforcement
authority over non-exempted covered
persons
• Provides the CFPB with authority to declare
an act or practice by a provider of a consumer
financial product or service to be an unfair,
deceptive or abusive act or practice

10. What Authority is Provided…Continued…
• Monitoring and data gathering authority
• “Super” disclosure authority to prescribe
rules to ensure that a consumer financial
product is fully and completely described to
a consumer
• Examination, supervision and enforcement
authority over non-exempted covered
persons
• Provides the CFPB with authority to declare
an act or practice by a provider of a consumer
financial product or service to be an unfair,
deceptive or abusive act or practice