Consumer Financial Services Alert - July 14, 2009

Representative Barney Frank introduced a bill that would create a new, independent Consumer Financial Protection Agency with sole rulemaking authority under federal consumer protection statutes, as well as supervisory, examination and enforcement authority over all providers of consumer financial products and services. The Agency is a centerpiece of the Obama Administration’s proposals to overhaul the nation’s financial services regulatory oversight structure. Click here for the bill and here for an article on the Administration’s vision for the Agency contained in the June 30 Alert.

The FDIC issued FAQs regarding the new disclosure requirements for certain sweep accounts. Among other things, the FAQs clarify the types of sweep accounts subject to the disclosure requirements. The FAQs also clarify the timing of the required disclosures:  for accounts in effect on July 1, 2009, the disclosures must be provided within 60 days after July 1, 2009 (i.e., no later than September 1, 2009) and at least annually thereafter; and for accounts established after July 1, 2009, the disclosures must be provided at the time the sweep account agreement is entered into. Click here for the FAQs.

The Massachusetts Division of Banks issued a report titled Compendium of Actions Taken Relative to Foreclosures and the Mortgage Industry, in which the Division describes the administrative and legislative actions it has taken since 2006 to address foreclosure and mortgage lending issues in Massachusetts. The report describes: (1) improved standards within the mortgage industry; (2) enhanced supervision and enforcement (the report states that since 2006, the Division has initiated 230 informal and 147 formal enforcement actions against licensed mortgage lenders and brokers); (3) assistance programs for homeowners and (4) improved state and local cooperation in addressing foreclosure and related mortgage industry issues. Click here for the report.