What is the CFPB and what are CFPB Regulations?
The Consumer Federal Protection Bureau, or CFPB, is a government agency established in 2011 with a focus on protecting the rights of consumers and assuring that banks, lenders and other financial companies follow fair practices.
The CFPB assists consumers in the submission and resolution of complaints against companies that are in violation of federal consumer financial law.
What regulations are covered under the CFPB?
Regulation B: Equal Credit Opportunity Act
Enacted in October 1974, the Equal Credit Opportunity Act made it illegal for creditors to discriminate against applicants based on age, race, sex, marital stator or public assistance received.
The ECOA requires creditors to:
• Inform consumers if their credit request has been accepted or denied within 30 days.
• Provide the reason a consumer is being denied a credit request.
Creditors also cannot:
• Disallow regular sources of income (including alimony, child support and social security payments).
• Ask a consumer their marital status if they are applying for separate, unsecured credit (unless the consumer lives in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin).
• Ask a consumer if they plan to have children/more children.
Regulation C: Home Mortgage Disclosure Act
Enacted in December 1975, the Home Mortgage Disclosure Act (HMDA) requires financial institutions to provide mortgage data to the general public.
This information helps public officials to make policy decisions and draw awareness to potentially discriminatory lending patterns.
Regulation D: Alternative Mortgage Transcation Parity Act
Enacted in 1982, the Alternative Mortgage Parity Act, or AMTPA, is a regulation that overrides state laws preventing banks from using any mortgages except conventional fixed-rate mortgages.
This act allows the following types of mortgages:
• Adjustable-rate mortgages
• Balloon payment mortgages
• Interest-only mortgages
Regulation E: Electronic Fund Transfers Act
Enacted in 1978, the Electronic Fund Transfers Act (EFTA) protects consumers when they use electronic means (including ATM, debit card, direct deposit, electronic check conversion, internet and pay-by-phone).
Under the EFTA banks and other financial institutions must provide certain information to consumers, including:
• Procedures to follow should an unauthorized transaction take place
• Transfers that can be made and what fees are associated with them
• Notice that you must pay a fee for use of another financial institution’s ATM
The EFTA also covers regulations related to withdrawal limits, the issuing of debit cards and overdraft protection. Consumers are able to challenge transactional errors and have them corrected within 45 days.
Regulation F: Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act was put in place to protect consumers from abusive practices by debt collectors.
Under the Fair Debt Collection Practices Act, all debt collectors must follow specific practices on their first contact and they cannot:
• Call a consumer before 8 a.m. or after 9 p.m. (or any time a consumer requests they do not call)
• Make an excessive number of phone calls
• Use profane language
• Threaten arrest or criminal prosecution
Consumers have the right to:
• Request written verification of their debts
• Request a debt collector to cease contact
• Report collections harassment and abuse
Regulation G: S.A.F.E. Mortgage Licensing Act - Registration of Residential Mortgage Load Originators
Registration G requires that all mortgage loan originators are registered and licensed.
Regulation H: S.A.F.E. Mortgage Licensing Act - State Compliance and Bureau Registration System
Developed after Regulation G, Regulation H requires all states to adopt minimum uniform standards for the licensing and registration of mortgage loan originators.
Regulation J: Interstate Land Sales Full Disclosure Act
Enacted in 1968, the Interstate Full Disclosure Act protects consumers from fraud in the sale or lease of land by regulating all interstate land sales.
This act requires sellers of 100 or more lots or condominium units to register their land and provide all purchasers with a Property Report.
Regulation K: Purchasers' Revocation Rights, Sales Practices and Standards Act
Related to the Interstate Land Sales Full Disclosure Act, the Purchasers' Revocation Rights, Sales Practices and Standards Act applies to land developers and their agents.
This act covers:
• Revocation rights of purchasers
• Sales practices and standards
• Advertising disclaimers
• Misrepresentation and fraud
Regulation L: Special Rules of Practice
Related to the Interstate Land Sales Full Disclosure Act, the Special Rules of Practice governs the procedures that allow land developers to obtain pre-filing assistance.
Regulation M: Consumer Leasing Act
Enacted in 1976, the Consumer Leasing Act protects the rights of lessees who sign a personal property lease for a term of four months or more.
Under the Consumer Leasing Act, lessors must:
• Provide lessees with accurate leasing cost information and disclosures in writing
• Provide new disclosures when a lessee renegotiates or extends a lease
The Consumer Leasing Act also requires certain information to be included in a lease, including:
• The number of lease payments and their dollar amounts
• The penalties associated with late payments
Regulation N: Mortgage Acts and Practices Acts - Advertising Rule
Called MAP, the Mortgage Acts and Practices Acts - Advertising Rule prohibits mortgage lenders from the deceptive advertising of mortgage load products across billboard, Internet, print, radio and television advertising
Under MAP, all mortgage lender advertising and marketing must be truthful and non-misleading.
There are a variety of scenarios that can cause an advertisement to be classified as deceptive, including misinformation related to:
• Interest charged for the product
• Fees, taxes and insurances associated with the product
• The APR (or any other payment rate)
• The variability of interest, payments or other terms of the product
Regulation O: Mortgage Assistance Relief Services Rule
The Mortgage Assistance Relief Services Rule, or MARS, protects consumers looking to negotiate new mortgage terms with for-profit providers of mortgage assistance relief services.
Oftentimes, consumers in this position are facing foreclosure, and this regulation is in place to provide protection for them.
According to MARS, mortgage assistance relief providers cannot:
• Charge upfront fees
• Misinterpret their services
• Advise consumers to end communication with their lender
Mortgage assistance relief providers must disclose the following to consumers:
• Particular information before allowing them to sign up for your services
• Negative consequences of not paying a mortgage
Regulation P: Privacy of Consumer Financial Information Rule
The Privacy of Consumer Financial Information Rule is a section of The Gramm-Leach-Bliley Act that was enacted in November 1999. This rule requires financial institutions to notify their clients of their privacy policies and information-sharing practices.
Clients must be made aware of the right to “opt out” of particular disclosures, prevent their financial institution from disclosing nonpublic personal information to third parties.
The following items (and more) must be provided to each consumer:
• Initial privacy notice
• Annual privacy notice
• Revised privacy notices
Regulation V: Fair Credit Reporting Act
Enacted in October 1970, the Fair Credit Reporting Act (FCRA) was developed to ensure the accuracy, privacy and fairness of the information on file with consumer reporting agencies.
Under this act, each consumer has the right to:
• Ask for a credit score
• Know what information is contained in their file
• Be informed if the information within their file was used against them or to deny an application
• Dispute inaccurate information
Consumer reporting agencies are required to:
• Correct or remove inaccurate or unverifiable information
Consumer reporting agencies may not:
• Report outdated negative information
• Provide information about consumers to individuals without a valid need
Regulation X: Real Estate Settlement Procedures Act
Enacted in 1974, the Real Estate Settlement Procedures Act, or RESPA, outlines the requirements that lenders must follow when providing consumers with mortgage information.
This includes the prevention of kickbacks and the sharing of information with consumers at certain stages of the lending process.
According to RESPA, lending institutions are required to:
• Provide certain disclosures, including the Good-Faith Estimate of Settlement Costs and the Mortgage Servicing Disclosures
• Follow established escrow accounting practices
• Provide the ability to compare settlement statements at closing
Regulation Z: Truth in Lending Act
Enacted in May 1968, the Truth in Lending Act (TILA) aims to protect consumers from unfair credit card practices by requiring lenders to disclose credit terms in a way that can be easily understood.
Before a consumer can borrow with a lender, the following information must be provided to them:
• Amount of money to be loaned
• Interest rate
• Annual percentage rate (APR)
• Finance changes and fees
• Payment schedule
• Total repayment amount (over lifetime of the loan)
Regulation DD: Truth in Savings Act
Designed to promote competition between depository institutions and provide educational information for consumers, the Truth in Savings Act was enacted in Decemeber 1991. Also called TISA, this act assists consumers who are comparing accounts at banks and other similar institutions.
TISA requires depository institutions provide clear and uniform disclosure of interest rates and fees associated with accounts. With the information required by TISA, consumers can more easily choose the right option for storing their money.