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State AGs Warn CFPB on Weakening Investigative Duties

Phil Hall
Apr 27, 2018
The Consumer Financial Protection Bureau has announced that it has taken measures to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic

The Consumer Financial Protection Bureau (CFPB) has received a letter from 16 Democratic state attorneys general that challenged the agency’s Jan. 26 Request for Information related to CFPB investigative authority. In their letter, the Attorneys General accused the Trump Administration of trying to weaken the CFPB’s “ability to issue civil investigative demands to companies and individuals who may be violating the law and taking advantage of consumers.”
New York Attorney General Eric T. Schneiderman, speaking on behalf of the coalition, vowed that the states would do the CFPB’s job if the agency backed away from its duties.
“The Trump Administration’s move to limit the CFPB’s basic investigative authority will only allow bad actors to exploit consumers–and get away free of penalty,” said Schneiderman. “If Washington refuses to stand up for consumers, my fellow Attorneys General and I won’t hesitate to enforce consumer protection laws and protect those we serve.”
Separately, the CFPB has finalized an amendment to its “Know Before You Owe” rule that addresses when mortgage lenders with a valid justification are able to pass on an increase in closing costs to consumers and identify them as a Closing Disclosure.
The finalized rule is based on a proposed amendment from July 2017 that raised the possibility of removing that particular timing restriction. The agency stated this update is based on feedback from lenders who request clarification on the matter, particularly in regard to cost increases based on a changed circumstance or borrower request. The final rule will take effect 30 days after publication in the Federal Register. 

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