Last week, the Consumer Financial Protection Bureau suffered a stinging defeat when a federal judge dismissed the bureau’s long-standing lawsuit against a Kentucky law firm. The battle is all but certain to continue on appeal, which will raise the stakes of this already-crucial case.
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The Consumer Financial Protection Bureau not only brings enforcement actions against companies it believes broke the law. It also supervises and examines the business operations of entities that are not suspected of illegal activity. If your operation gets hit with a CFPB exam, there is one thing you must do to prepare: review the bureau’s Supervision and Examination Manual.
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What sports team would decline the chance to peek at their opponent’s playbook? Very few, I imagine. Yet anyone being investigated by the Consumer Financial Protection Bureau now has that opportunity—by studying the bureau’s policies and procedures manual, recently made public through a Freedom of Information Act request.
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Yesterday, the Florida Attorney General and the Consumer Financial Protection Bureau hit Ocwen Financial Corporation with twin lawsuits for the company’s allegedly improper mortgage-servicing practices. Regulators from nearly two dozen states are either issuing cease-and-desist orders against Ocwen or yanking its licensing. At the heart of the company’s problems lies a vexing issue: its software platform, which it developed itself, is supposedly junk.
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One of the popular buzzwords these days is disruption. For example, Zillow came along and, through the aggressive marketing of leads, disrupted the ways in which many mortgages were originated. According to some reports, the Consumer Financial Protection Bureau is now disrupting Zillow’s tactics. Lead purchasers can protect themselves in several ways.
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For the past several years, Prospect Mortgage, LLC, has weathered a blast furnace of regulatory heat due to its aggressive marketing efforts, which some have called kickbacks. Last week, the company entered into a consent order with the Consumer Financial Protection Bureau that serves as a useful guide for other real estate businesses.
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