Here is a blog entry that will have absolutely no relevance to the vast majority of banks about a form that very few Compliance Officers will ever search for in their loan files. Yet, perhaps you’ll find this interesting nonetheless. The form I mention is the Small Business Jobs Act Certification, and I mention it only because, as General Counsel for American Bank Systems, I learned about this form while adding it to our new CompliancePro® Loans system.
The certification form is required when a community bank, participating in the Small Business Lending Fund (SBLF), makes a small business loan. The SBLF is a source of capital created by the Small Business Jobs Act of 2010 to encourage community banks to make loans to small businesses. The sole purpose of the certification form is to document that none of the principals of the borrower receiving funds under the SBLF have been convicted of, or pleaded nolo contender to, a sex offense against a minor.
Now, don’t get me wrong, I am completely in favor of not loaning taxpayer money to any business run by a sex offender. But I find it interesting that, somewhere in the making of the legislation that was intended to jolt the Nation’s lagging economy, some Congress member read the bill and thought to himself or herself, “A $30 billion fund to encourage lending to small business will help put our economy back on track. Great! But wait! No funds for sex offenders!”
Again, I think that’s a good thing. It just strikes me as odd that something like that would be so important to a member of Congress in the midst of a national debate about what our economy needs. It also strikes me as odd that not all sex offenders are excluded from receiving funds; apparently Congress was not as concerned about lending to persons who commit a sex offense against an adult.
By the way, if you are a Compliance Officer and your bank is one of the few that participated in this program, you have to certify annually that the principals of the businesses that received loans are not sex offenders of the ilk described. And if you have to make such an annual certification, wouldn’t you be glad to have the borrower certification form in your loan system?
Tuesday, March 27, 2012
Friday, March 2, 2012
Guilty Until Proven Innocent
CFPB's announcement trumpeting their bank attack, I mean consumer help, efforts struck a chord with me, and I want to share not jus the chord but whole chorus with you.
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) began accepting consumer complaints about bank accounts, including checking accounts, savings accounts, CDs, and related services.
Apparently, the consumer complaint practices of the states, OCC, FRB, and FDIC, along with those of the dreaded trial lawyers, weren’t enough to beat financial institutions into submission. The phrase from the movie, Animal House, “Thank you sir, may I have another.”, comes to mind as I consider what the Bureau (J. Edgar would be mortified at the use of this term) intends for all financial institutions.
“Deposit accounts play a critical role in the lives of most Americans, but these products and the laws governing them are complicated,” said CFPB Director Richard Cordray. “Consumers need someone on their side to keep banks and credit unions accountable—that is our job.”
Complicated? Complicated? The regulatory process has burdened the institutions and the consumers with so many rules that what once was a two-line account agreement (We’ll hold your money until you want it) has become a document the size of an Obama state-of-the-union speech, complete with applause lines. (…subject to the requirements of §229.10(c)(1) (i) through (v) and §229.10(c)(2) only with respect to the first $5,000 of funds deposited on any one banking day; but the amount of the deposit in excess of $5,000 shall be available for withdrawal not later than the ninth business day following the banking day on which funds are deposited; and…) The Bureau can uncomplicate the products by repealing a boatload of the regulations that caused the complification (to quote Pres. Bush 43).
By the way, Mr. Courderoy, “your job” hasn’t even been established yet. Your recess appointment was a clear violation of congressional rules and served to further advance the anti-business sentiment of the current administration.
Almost nine out of ten American households have at least one checking account, and many also maintain a savings account. Yet, despite the fact that they are commonplace, bank accounts can be complex and confusing.
Flying an F-16 is complex and confusing. Adding and subtracting is neither complex nor confusing. If I cannot understand how to fly an F-16, I should not be allowed to get in the cockpit. If I cannot understand how to add and subtract, I should not be allowed to open a deposit account. Maybe a new law, "No Consumer Left Behind" is in order.
Consumers can file a bank account complaint with the CFPB using the Bureau’s website, or by mail, fax, or telephone. The CFPB’s U.S.-based call centers handle calls with little or no wait times, provide services for the hearing- and speech-impaired, and have the ability to assist the public in 187 languages.
187 languages??? God bless America! The Bureau is diligently working to make it “super easy” to file a frivolous complaint against a financial institution. They, at the same time, are making it “super hard” for institutions to comply, earn a profit, and provide the necessary products and services that the consumers need and want.
The CFPB recently redesigned its website to provide a more seamless customer experience when filing a complaint or checking the status of an existing complaint. In addition, the consumerfinance.gov homepage prominently features the work the Bureau is doing to make the costs and risks of financial products clear to consumers. A new navigation bar makes it easier for all of the site’s visitors – consumers, financial institutions, and others – to access the information and tools available online.
Shouting louder in a language the hearer doesn’t understand will not help with understanding. If the regulatory language of the existing regulations (required by the regulators) is not understood by the consumer, how will adding more regulatory language help? You are simply shouting louder in a language that the consumer does not understand.
The Bureau expects banks to respond to complaints within 15 days and seeks to close all complaints within 60 days. Consumers are given a tracking number after submitting a complaint. They are then able to log in to the CFPB website at any time and check the status of their case. Each complaint will be processed individually and consumers will have the option to dispute a bank’s resolution. Sadly, the Bureau is the “ambulance chasing lawyer” (and my apologies to all ambulance chasing lawyers) of the regulatory agencies. With all the free time most bankers have, we can now spend it responding to complaints about bank pens not working, bank calendars not having pretty enough pictures, and why an overdraft fee was charged on an account where the owner spends more than he makes (sort of like Congress).
The CFPB began taking credit card inquiries and complaints when it launched on July 21, 2011. In December, the Bureau began handling complaints on mortgages and other home loans. Today’s announcement represents the third phase of the Bureau’s Consumer Response complaints program.
The Bureau’s Consumer Response team has already received and resolved thousands of complaints on mortgages and credit cards. As of February 22, 2012, the Bureau had received over 20,000 complaints, including nearly 7,000 on mortgages and almost 12,000 on credit cards. The Bureau has seen three major issue areas with respect to credit cards: consumer confusion, third-party fraud, and factual disputes between the consumer and the card issuer. For mortgages, the biggest complaint source has been foreclosures, and the majority of those complaints have been sent to companies for review and response.
A good statistic to show, and one which will never be shown, is how many of the complaints were frivolous or fraudulent on the consumer’s part. Maybe we should start our own website and trumpet these findings.
On the topic of banking accounts, the Bureau anticipates receiving complaints in five categories:
• Account opening, closing, and management;
• Deposits and withdrawals;
• Using a debit or ATM card;
• Making or receiving payments and sending money to others; and
• Problems related to low account funds.
And if we don’t receive them, we’ll manufacture the complaints so as to justify our existence. Vee haf vays (“we have ways” for all you non-German speakers) of getting the evidence to match our conclusions.
Consumers with complaints on bank accounts, credit cards, and mortgages should contact the Bureau at ConsumerFinance.gov or call 1-855-411-CFPB.
Or 1-728-662-2265 (RAT ON A BANK)
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) began accepting consumer complaints about bank accounts, including checking accounts, savings accounts, CDs, and related services.
Apparently, the consumer complaint practices of the states, OCC, FRB, and FDIC, along with those of the dreaded trial lawyers, weren’t enough to beat financial institutions into submission. The phrase from the movie, Animal House, “Thank you sir, may I have another.”, comes to mind as I consider what the Bureau (J. Edgar would be mortified at the use of this term) intends for all financial institutions.
“Deposit accounts play a critical role in the lives of most Americans, but these products and the laws governing them are complicated,” said CFPB Director Richard Cordray. “Consumers need someone on their side to keep banks and credit unions accountable—that is our job.”
Complicated? Complicated? The regulatory process has burdened the institutions and the consumers with so many rules that what once was a two-line account agreement (We’ll hold your money until you want it) has become a document the size of an Obama state-of-the-union speech, complete with applause lines. (…subject to the requirements of §229.10(c)(1) (i) through (v) and §229.10(c)(2) only with respect to the first $5,000 of funds deposited on any one banking day; but the amount of the deposit in excess of $5,000 shall be available for withdrawal not later than the ninth business day following the banking day on which funds are deposited; and…) The Bureau can uncomplicate the products by repealing a boatload of the regulations that caused the complification (to quote Pres. Bush 43).
By the way, Mr. Courderoy, “your job” hasn’t even been established yet. Your recess appointment was a clear violation of congressional rules and served to further advance the anti-business sentiment of the current administration.
Almost nine out of ten American households have at least one checking account, and many also maintain a savings account. Yet, despite the fact that they are commonplace, bank accounts can be complex and confusing.
Flying an F-16 is complex and confusing. Adding and subtracting is neither complex nor confusing. If I cannot understand how to fly an F-16, I should not be allowed to get in the cockpit. If I cannot understand how to add and subtract, I should not be allowed to open a deposit account. Maybe a new law, "No Consumer Left Behind" is in order.
Consumers can file a bank account complaint with the CFPB using the Bureau’s website, or by mail, fax, or telephone. The CFPB’s U.S.-based call centers handle calls with little or no wait times, provide services for the hearing- and speech-impaired, and have the ability to assist the public in 187 languages.
187 languages??? God bless America! The Bureau is diligently working to make it “super easy” to file a frivolous complaint against a financial institution. They, at the same time, are making it “super hard” for institutions to comply, earn a profit, and provide the necessary products and services that the consumers need and want.
The CFPB recently redesigned its website to provide a more seamless customer experience when filing a complaint or checking the status of an existing complaint. In addition, the consumerfinance.gov homepage prominently features the work the Bureau is doing to make the costs and risks of financial products clear to consumers. A new navigation bar makes it easier for all of the site’s visitors – consumers, financial institutions, and others – to access the information and tools available online.
Shouting louder in a language the hearer doesn’t understand will not help with understanding. If the regulatory language of the existing regulations (required by the regulators) is not understood by the consumer, how will adding more regulatory language help? You are simply shouting louder in a language that the consumer does not understand.
The Bureau expects banks to respond to complaints within 15 days and seeks to close all complaints within 60 days. Consumers are given a tracking number after submitting a complaint. They are then able to log in to the CFPB website at any time and check the status of their case. Each complaint will be processed individually and consumers will have the option to dispute a bank’s resolution. Sadly, the Bureau is the “ambulance chasing lawyer” (and my apologies to all ambulance chasing lawyers) of the regulatory agencies. With all the free time most bankers have, we can now spend it responding to complaints about bank pens not working, bank calendars not having pretty enough pictures, and why an overdraft fee was charged on an account where the owner spends more than he makes (sort of like Congress).
The CFPB began taking credit card inquiries and complaints when it launched on July 21, 2011. In December, the Bureau began handling complaints on mortgages and other home loans. Today’s announcement represents the third phase of the Bureau’s Consumer Response complaints program.
The Bureau’s Consumer Response team has already received and resolved thousands of complaints on mortgages and credit cards. As of February 22, 2012, the Bureau had received over 20,000 complaints, including nearly 7,000 on mortgages and almost 12,000 on credit cards. The Bureau has seen three major issue areas with respect to credit cards: consumer confusion, third-party fraud, and factual disputes between the consumer and the card issuer. For mortgages, the biggest complaint source has been foreclosures, and the majority of those complaints have been sent to companies for review and response.
A good statistic to show, and one which will never be shown, is how many of the complaints were frivolous or fraudulent on the consumer’s part. Maybe we should start our own website and trumpet these findings.
On the topic of banking accounts, the Bureau anticipates receiving complaints in five categories:
• Account opening, closing, and management;
• Deposits and withdrawals;
• Using a debit or ATM card;
• Making or receiving payments and sending money to others; and
• Problems related to low account funds.
And if we don’t receive them, we’ll manufacture the complaints so as to justify our existence. Vee haf vays (“we have ways” for all you non-German speakers) of getting the evidence to match our conclusions.
Consumers with complaints on bank accounts, credit cards, and mortgages should contact the Bureau at ConsumerFinance.gov or call 1-855-411-CFPB.
Or 1-728-662-2265 (RAT ON A BANK)
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