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CFPB Update


The Consumer Financial Protection Bureau (CFPB) has outlined plans to provide advance notice of potential enforcement actions to individuals and firms under investigation. The Early Warning Notice process allows the subject of an investigation to respond to any potential legal violations that CFPB enforcement staff believe have been committed before an ultimate decision is made by the CFPB as to whether or not to commence legal action. The Early Warning Notice process is modeled on similar procedures that have been successful at other federal agencies. It begins with the CFPB’s Office of Enforcement explaining to individuals or firms that evidence gathered in a CFPB investigation indicates they have violated consumer financial protection laws. Recipients of an Early Warning Notice are then invited to submit a response in writing, within 14 days, including any relevant legal or policy arguments and facts. The Early Warning Notice is not required by law, and the decision to give notice in particular cases is at the discretion of the CFPB, and will depend on factors such as whether prompt action is needed.

The CFPB announced its second phase of its “Know Before You Owe” mortgage disclosure project, introducing new mortgage closing document prototypes, as part of its ongoing efforts in combining the Truth in Lending Act and Real Estate Settlement Procedures Act mortgage related disclosures, as required by the Dodd-Frank Act. These latest prototypes will combine the two forms consumers receive before finalizing a home loan into a single, easy-to-understand mortgage closing document. These latest closing document drafts represent the first of four prototypes which will be released over the next few months, and the CFPB began consumer testing on this round of prototypes in Des Moines, IA on Tuesday, as well. Consumer testing will continue through February, 2012, in three additional markets, which have yet to be determined. The CFPB indicated that it is also consolidating other new and current federal mortgage disclosure requirements – “boiling down unnecessary paperwork by as much as 50%.” For more information concerning these latest disclosure prototypes, click here.

The CFPB has posted a blog targeted towards consumers containing tips to avoid overspending during the holidays and to assist with avoiding taking on too much debt. The blog suggests several ideas of how consumers can appropriately plan and take proactive approaches with respect to holiday spending, in general. 


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