The director of the U.S. Consumer Financial Protection Bureau said a new rule is forthcoming to prevent most mortgage servicers from imposing charges for hazard insurance – unless there is a “reasonable” concern that a borrower will not secure a policy.
The Consumer Financial Protection Bureau received 13,210 complaints from credit card and mortgage holders between July 21, 2011, when the agency was launched, and Dec. 31. The CFPB expects to handle consumer complaints on all financial products and services within its authority by the end of 2012.
The venerable Federal Trade Commission had been working to protect consumers from unfair business practices for 96 years when Wall Street reform in 2010 created the Consumer Financial Protection Bureau to expand and centralize protections against unfair lending practices. Now, the two agencies are officially cooperating with each other.
New rules for international money transfers by U.S. remittance providers generally require full disclosure of the exchange rate and all fees associated with a transfer. The new rules also require remittance transfer providers to investigate disputes and remedy errors.
Payday loans provide consumers quick cash, but they also are notorious for terms that can equal an annual percentage rate of more than 400 percent. Often, these small-amount loans must be repaid before the costumer’s next paycheck arrives.
The nation’s new consumer watchdog is preparing to supervise “nonbanks” as part of its mandate to protect Americans from deceptive or abusive lending practices. For markets – such as debt collection, consumer reporting, auto financing, and money services businesses – the CFPB said it can supervise “larger participants,” but it must define what a “larger participant” means.
Bypassing staunch GOP opposition, President Obama today appointed former Ohio attorney general Richard Cordray to head the six-month-old Consumer Financial Protection Bureau, exercising his “recess appointment” authority. Doing so is already creating more partisan bickering over the controversial agency, which opened its doors in July, one year after its creation was mandated by the Dodd-Frank financial reform legislation.