Professor David Reiss, an expert in real estate and consumer finance law, has been a frequent commentator on issues concerning the Consumer Financial Protection Bureau (CFPB).
On the verge of the upcoming Consumer Financial Protection Bureau’s Escrow Requirement, Professor Reiss explained to CFPB Journal how the new rules implemented by the Dodd Frank Act will affect creditors. “Creditors will benefit from the float on the aggregate escrow accounts,” he said. “[It is] a small amount for each individual homeowner but potentially a meaningful amount for creditors, particularly if interest rates rise to their historic average or higher in coming years.”
Professor Reiss also spoke to E-commerce Times about the recent expansion of the CFPB’s Consumer Complaint Database. The database, which launched last summer with about 19,000 consumer complaints about credit card companies, now includes data about mortgage companies, banks, and private student loan providers, increasing the number of complains to approximately 90,000. “As a general rule, regulators should favor disclosure, which is integral to most consumer protection regimes,” he said. “Banks and financial institutions have focused on the way that the database can be used inappropriately—allowing, for instance, adversaries to build an unverified record of wrongdoing by financial institutions.”
Finally, Professor Reiss commented on news of the CFPB’s enforcement actions against four large mortgage insurers that had made illegal reinsurance deals with lenders, potentially totaling up to $6 billion in kickbacks. The firms were ordered to pay $15.4 million in fines, but experts anticipate more enforcement activity to come. “In the context of the massive amount of mortgage fraud that occurred in this industry, a $15 million penalty seems pretty small,” he told American Banker and Law 360. “But given that further enforcement against the large financial institutions that demanded the kickbacks is possibly still on the horizon, the jury is out on whether this will be an effective set of enforcement actions.”
Professor Reiss is the founding director of the Community Development Clinic. He is the co-editor of REFinblog.com with Professor Brad Borden.
Learn more about Professor Reiss and REFinblog.com.