CFPB and FHFA Issue Report Concerning Mortgage Comparison Shopping by Consumers
On Jan. 13, the CFPB issued a report detailing the results of the National Survey of Mortgage Borrowers, an ongoing survey of consumers who took out mortgages in 2013. The project is being conducted jointly by the CFPB and the Federal Housing Finance Agency. According to the report, nearly half of mortgage borrowers do not shop for a mortgage when purchasing a home. The report also indicates that “informed consumers” are twice as likely to shop for a mortgage. However, the CFPB found it troubling that most consumers get their information about mortgages from lenders or brokers because “what is best for the lender or broker is not always best for the consumer.”
CFPB Releases “Owning a Home” Toolkit
In conjunction with the release of the National Survey of Mortgage Borrowers report, the CFPB also released its “Owning a Home” toolkit, which is a part of its Know Before You Owe mortgage initiative. The toolkit is an online, interactive resource designed to help and encourage more consumers to shop for a mortgage “by researching and inquiring with multiple lenders, applying for mortgages with multiple lenders, or applying for different kinds of loans.” It includes the beta version of an interest rate checker that shows what interest rates may be available to borrowers based on various credit criteria. The rate checker is based on daily rate data from large banks, regional banks and credit unions covering about 80 percent of the mortgage market.
CFPB Releases Safe Student Account Scorecard
On Jan. 14, the CFPB released a request for information regarding its initiative on safe student banking. The CFPB is seeking feedback on its new Safe Student Account Scorecard that the CFPB intends colleges to use when negotiating agreements with financial institutions for them to market financial products to students. According to the CFPB, the scorecard would “help colleges access upfront information about fees, features, and sales tactics before agreeing to a sponsorship [, and] would help create a level-playing field for all financial institutions that offer affordable products, regardless of their ability to pay bonuses to schools.”
This is not the first attempt to regulate agreements between colleges and financial institutions. The Credit CARD Act of 2009 (CARD Act) imposed restrictions on how financial institutions may market credit cards on college campuses and required that the partnership agreements between credit card issuers and colleges be made publicly available. However, these CARD Act provisions do not apply to other financial products like prepaid cards and debit cards. The scorecard is an attempt to address this gap. The scorecard, the use of which would be voluntary, would ask for the following types of information from financial institutions that colleges could then use to evaluate the merits of an agreement: (i) a description of product fees and features; (ii) disclosure about the financial institutions’ marketing practices; (iii) the amount the financial institution earns from the accounts; and (iv) an annual summary of fees.
The CFPB will accept input on the draft scorecard until March 16, 2015.
CFPB Names Anthony Alexis as Assistant Director for Enforcement
On Jan. 7, the CFPB formally named Anthony Alexis as the Assistant Director for Enforcement. Alexis joined the CFPB in February 2012 as Deputy Assistant Director for Enforcement Field Litigation. Kent Markus, the former Assistant Director for Enforcement, has assumed a new role as Senior Counsel to Steve Antonakes, the CFPB’s Deputy Director.
CFPB Releases Reports to Congress
Earlier this month, the CFPB released two reports to Congress. The first, required pursuant to section 1017(e)(4) of the Dodd-Frank Act, is the CFPB’s annual appropriations report. Covering the period Oct. 1, 2013 through Sept. 30, 2014, it provides information regarding financial operating plans and forecasts, the financial condition of the CFPB and results of its operations, and the sources and application of CFPB funds.
The second report to Congress, Growing Our Human Capital, details the CFPB’s training and workforce development, workplace flexibilities, and recruitment and retention.