Wednesday night , Pleasure Feigenbaum , the brand new You are able to Department of monetary Services’ (“DFS”) executive deputy superintendent, and Jane Aziza, the main from the Bureau of Consumer Frauds and Protection in the New You are able to Attorney General, spoke in the monthly meeting from the Consumer Matters Committee for that New You are able to City Bar Association. Not just did Ms. Feigenbaum and Ms. Aziza summarize recent regulatory and enforcement actions taken by their particular agencies, they also discussed exactly what the consumer financial services industry can get in the DFS and Attorney General within the coming several weeks.
Ms. Aziza emphasized that her agency remains “frustrated by big banks’ failure to comply” using the servicing standards implemented within the National Mortgage Settlement. She was particularly critical of banks and servicers’ “inability to communicate” with delinquent borrowers. Ms. Aziza did complement one major bank for becoming “really responsive” to borrowers’ needs, noting this institution had, amongst other things, redesigned the correspondence utilized in outreach to delinquent consumers.
Within our web seminar recently, we discussed the lawyer General’s office’s laser-like concentrate strictly enforcing the the National Mortgage Settlement. Thus, it comes down as no real surprise that compliance using its servicing standards will stay a principal focus from the Attorney General’s office continuing to move forward. Mortgage banks and servicers performing business in New You are able to that neglect to update their loss minimization procedures and policies to be in compliance using the CFPB’s Mortgage Servicing Rule and also the National Mortgage Settlement achieve this in their peril.
Ms. Aziza was quite candid in discussing actions around the immediate horizon. She established that the lawyer General is contemplating enforcement actions against “foreclosure related scams”, education loan servicers and pay day lenders. Most particularly, Ms. Aziza pointed out the Attorney General is studying lawyers that provide forbearance or debt settlement services to borrowers. She designated lawyers specializing in “mass action” lawsuits. Based on Ms. Aziza, these lenders regularly bill consumers for taking part in a suit that generally “is not effective.” We applaud the lawyer General’s office to take a vital take a look at these “mass action” lawsuits, that have exploded recently. From your experience, many of these “mass action” lawsuits are meritless and barely lead to significant dollars visiting the consumers’ pockets.
Ms. Feigenbaum discussed the DFS’ recent enforcement action against Condor Capital, which once we reported recently was the very first law suit introduced with a condition regulator under Section 1042 of Dodd Frank. She noted that on May 13th the government court issued an initial injunction and purchased the appointment of the receiver. The government court also granted the guaranteed loan provider for Condor Capital’s motion to intervene, which based on Ms. Feigenbaum, is rare inside a government enforcement action.
Ms. Feigenbaum heralded Section 1042 of Dodd Frank as supplying DFS with “great, new authority” to create enforcement actions against condition licensed banks and banking institutions for UDAAP violations. Before the passage of Section 1042 of Dodd Frank, the DFS’ remedies were restricted to getting an administrative proceeding or seeking injunctive relief. Ms. Feigenbaum left little question the DFS intends to use Section 1042 later on against condition chartered or licensed entities participating in UDAAP violations. Given Feigenbaum’s acknowledgement the DFS complaint database is “a grounds for enforcement”, it’s imperative that companies regularly review individuals complaints and proactively address systematic customer complaints.
Ms. Feigenbaum also discussed recent DFS’ actions against collectors. She established that the DFS has reviewed your comments ought to to the initial business collection agencies rules, which govern pre-litigation collection activities which a revised rule had been finalized. Based on Ms. Feigenbaum, you will see a thirty day comment period when the revised rule is released. We feel the DFS promises to release its final rule in front of the suggested business collection agencies rule from the CFPB. Since CFPB collaborates using the DFS on numerous matters, we’d expect the CFPB’s suggested rule to include significant content in the DFS’ rules. Ms. Feigenbaum also says the DFS could be issuing a remark letter as a result of your debt collection default judgment proposal announced a week ago by Chief Judge Jonathan Lippman. We predict DFS to induce the brand new You are able to Condition Unified Courts to consider language within the suggested type of affidavit which may require affiant to specifically verify getting personal understanding of the baby debtor’s loan records.
Finally, Ms. Feigenbaum addressed pay day lending, that has been a regular focus from the DFS. She established that the DFS is ongoing its analysis from the 16 lead generators so it offered having a subpoena last December, which an enforcement action against a number of charge generators was “likely”. We wouldn’t be surprised when the DFS depends on Section 1042 of Dodd Frank in getting these actions.