August 2015 - Denbeaux & Denbeaux Attorneys at Law

Low-Income Housing Goals Set for Fannie Mae and Freddie Mac


Low-Income Housing Goals Set for Fannie Mae and Freddie Mac

August 19th, 2015 by

Business Day – New York Times-

The federal agency that regulates the mortgage finance companies Fannie Mae and Freddie Mac on Wednesday set final goals for low-income housing for the next two years. The action establishes targets for homes and rental apartments and, for the first … read full article

Menendez Introduces the Christopher Bryski Student Loan Protection Act

August 19th, 2015 by

Menendez Introduces Christopher’s Law to Protect Student Loan Borrowers and their Families

Legislation named in honor of NJ student, Christopher Bryski, Rep. Bill Pascrell (D-NJ9) to Introduce House version


The bill, first introduced by the late Sen. Frank Lautenberg in 2009, reintroduced in 2014 by Senator Menendez, bars lenders “from automatically declaring a default or accelerating the obligations on an otherwise performing loan upon the death, disability, or bankruptcy of a co-signer” and bars lenders “from declaring a default or acceleration upon the death, disability, or bankruptcy of the student if the co-signer continues to meet all payment obligations under the loan,” according to a news release from Menendez’s office.


WASHINGTON, DC – U.S. Senator Bob Menendez (D-NJ), senior member of the Senate Banking Committee, today introduced the Christopher Bryski Student Loan Protection Act, legislation designed to increase transparency in the student loan process and provide better financial protections for borrowers and their co-signers in the event of severe injury or death. According to the CFPB, more than 90 percent of private student loans have a co-signer such as a parent or grandparent. The bill is cosponsored by Senators Cory Booker (D-NJ), Kirsten Gillibrand (D-NY), Al Franken (D-Minn) and Elizabeth Warren (D-Mass).

Many private student loans allow a lender to automatically put a borrower into default—and require immediate repayment of the loan—if a student borrower or co-signer dies, becomes disabled, or files for bankruptcy, even if the loan is in good standing and payments continue to be made. Further, while many lenders allow a co-signer to be released from a loan after the borrower meets a minimum number of payments and a credit check, they often make the process so burdensome and inconvenient that, according to the CFPB, less than 1 percent of borrowers are able to actually secure a co-signer release.

“Middle class families like Christopher’s should not have to endure the devastating loss of a child only to learn they must also face the financial hardship of a huge student loan debt,” said Sen. Menendez. “And if a student hasn’t missed a payment and their loan is in good standing, there is absolutely no reason for a lender to put the loan into default because tragedy strikes. Lenders also shouldn’t be able to use hidden tricks and confusing paperwork to stop the fair release of co-signers from a loan. This law is designed to stop these practices and ensure fairness for students and their families.”

The legislation is named in honor of Christopher Bryski, a New Jersey college student who passed away in 2006 after falling into a two-year coma from a severe traumatic brain injury. While mourning the loss of their son, Christopher’s family was blindsided with tens of thousands of dollars in student loan debt they were obligated to repay his private lender, because Christopher’s father had co-signed his loan and they were unaware of their obligations if such a tragic event were to occur.

“We are extremely grateful for the willingness of Senator Menendez to introduce Christopher’s Law,” said the Bryski family. “We know Christopher Bryski, who we lost nine years ago this month, and who the bill is named after, would be grateful and honored as well. This bill, originally proposed by our family in 2009, was brought to US Congress by the late Representative John Adler, and the late Senator Frank Lautenberg. We are hoping this bill passes during this Congressional Session, with the help of Senator Menendez, to help alleviate undue hardship for families already struggling to cope with the death or serious injury of their loved one. Our original intent remains the same, to mandate transparency in the private and federal student loan industry, with six years of hard work to prove it.”

The bill is supported by: National Education Association (NEA), American Federation of Teachers (AFT), Center for Responsible Lending (CRL), U.S. Public Interest Research Group (U.S. PIRG), Consumer Federation of America (CFA), National Association of Student Financial Aid Administrators (NAFSAA), and the American Council on Education (ACE).

Menendez first introduced Christopher’s Law in 2014.

The Christopher Bryski Student Loan Protection Act or “Christopher’s Law”

(1) Protects students and their families during a time of loss. The CFPB continues to receive reports from borrowers who discover their loans, which are otherwise in good standing, are now in default because a co-signer, such as a parent or grandparent, has died. CFPB’s recent survey of private student loan contracts found most contracts contain automatic default clauses. Christopher’s Law will prohibit a lender from automatically declaring a default or accelerating the obligations on an otherwise performing loan upon the death, disability, or bankruptcy of a co-signer. Similarly, the lender would be prohibited from declaring a default or acceleration upon the death, disability, or bankruptcy of the student if the co-signer continues to meet all payment obligations under the loan.

(2) Provides for automatic co-signer release when required criteria are met. Many creditors advertise options to release a co-signer from a loan once the borrower meets certain payment and credit conditions, but most creditors are not transparent about their requirements and make the process unduly burdensome in a way that inhibits borrowers’ ability to exercise it. The CFPB reports that less than 1 percent of borrowers with loans that include a co-signer release actually obtained one. Christopher’s Law will require lenders to automatically release the co-signer when the applicable conditions are met, and directs the CFPB to set boundaries to prevent lenders from setting unfairly restrictive requirements for a co-signer release.

(3) Increases transparency and improves disclosures regarding the obligations of co-signers. Christopher’s Law will require lenders to clearly and conspicuously describe, in writing, any co-signers’ obligations on a loan, including the effect a borrower’s or co-signer’s death, disability, or inability to engage in any substantial gainful activity would have on such obligations. To help alleviate confusion surrounding the loan obligation in the event of the death or disability of a borrower, the bill will also require lenders to provide student loan borrowers the option to designate an individual to have the legal authority to act on their behalf in such a circumstance.



CFPB Says Financial Exploitation Common Form of Elder Abuse

August 18th, 2015 by

Prepared Remarks of CFPB Director Richard Cordray at the White House Conference on Aging


Director, Richard Cordray

The Consumer Financial Protection Bureau is working hard to make financial markets work better on behalf of 320 million American consumers. In particular, our new agency specifically recognizes the need to protect older Americans against financial exploitation and promote economic security later in life. With the aging of the baby boomer generation, that mission has never been more important.

Our Office for Older Americans has done much great work around elder justice, the topic of the upcoming panel. Our team has traveled the country listening to older Americans. Based on what we heard, we have issued studies, guides, and advisories to arm seniors and their caregivers with the information and tools they need to protect themselves and their precious retirement savings.

Unfortunately, we have seen that older Americans all too often fall prey to financial exploitation. They make attractive targets because they often have higher household wealth in the form of retirement savings

or home equity or both. They may develop impaired capacity and they can be isolated and vulnerable.

Recent studies found that financial exploitation is the most common form of elder abuse, but only a small fraction of incidents is ever reported. So we are calling on financial institutions to do their part to help protect older Americans. The Consumer Bureau will release an advisory later this year to help financial institutions prevent, recognize, and report elder financial abuse. When seniors fall victim to a scam or to theft by a trusted family member, they may be too embarrassed or too frail to pursue legal action or even to report that they have suffered harm. So it is crucial that others are looking out for them. Financial institutions are especially well-positioned to prevent such fraud.

The Consumer Bureau was born out of the recent financial crisis, and our work is still in its early stages. But as the American economy recovers, we want consumers of all ages to be able to look ahead with hope and resilience. We want them to know they have a new agency standing on their side and looking out for their interests, to help restore confidence and trust in the consumer financial marketplace. With your help and advice, we are glad to work with you to do that.

This year marks the 50th anniversary of Medicare, Medicaid, and the Older Americans Act, as well as the 80th anniversary of the Social Security Act. As we celebrate all the benefits these laws have brought to countless Americans, let’s not forget all there is still to do. I look forward to today’s discussion, facilitated by Assistant Secretary for Aging Kathy Greenlee. She has been an excellent partner in this work and a strong leader of the Elder Justice Coordinating Council. Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit

CFPB, Faces Challenges by Democrats over Payday Lending

August 17th, 2015 by

In an April 30,2015 Op-Ed by Adam Deutsch Esq., of Denbeaux and Denbeaux, wrote about payday lending,”

“It is unethical for the state to fund its pensions from the profits of an unscrupulous company that is prohibited from conducting business within the state. The Division of Investments should immediately divest from the private fund managed by JLL Partners and instead invest in companies that reflect the social and moral landscape of the state.

By virtue of the investment, the New Jersey State Investment Counsel is part owner of Ace, the second-largest payday lending company in the United States.”

Obama, Elizabeth Warren’s new financial oversight agency, CFPB, faces challenge by Democrats

 – The Washington Times – Saturday, August 1, 2015

A growing number of congressional Democrats are challenging the new financial oversight agency championed by President Obama and Massachusetts Sen. Elizabeth Warren, cautioning against its latest proposed rules for payday lenders that could hurt consumers.

The U.S. Consumer Financial Protection Bureau, the newest federal agency, proposed new rules this spring that seek to regulate payday lenders frequently used for banking services by minorities, the poor and the elderly who need short-term emergency loans.

Mr. Obama and Ms. Warren have accused the payday lending agency of engaging in predatory lending and seek to impose sweeping regulations across all lenders.

But a growing number of Democrats, including Florida Rep. Debbie Wasserman Shultz who heads the Democratic National Committee, are challenging the new rules as a bad example of a “one-size-fits-all” policy that will limit consumers’ banking choices.

In a bipartisan letter sent to the agency on Saturday, a handful of lawmakers included Ms. Schultz, Florida Reps. Alcee Hastins and Corrine Brown, and Calif. Reps. Jim Costa and Tony Cardenas.

“We are concerned that individuals who rely on the availability of short-term and small-dollar loans to make ends meet will be forced to turn to more expensive alternatives potentially resulting in a phenomenon that is hardly the financial protection that the CFPB seeks to accomplish through this regulatory scheme,” the 28 lawmakers, including 16 democrats and 12 Republicans wrote in the letter.

Photo by: Susan Walsh
Sen. Elizabeth Warren, D-Mass., left, talks with President Barack Obama following a statement with Richard Cordray, the new director of the Consumer Financial Protection Bureau, in the State Dining Room of the White House in Washington. (AP Photo/Susan Walsh, File)

The lawmakers implored CFPB to work together with industry stakeholders to ensure a transparent process and to conduct field trials in specific markets to test how the new rules will work in practice.

“Indeed the best interests of the consumer can only be advanced when we ensure that lending practices are both fair and transparent, while also making certain that Americans most in need are not further restricted in their credit options,” the lawmakers wrote. “Any rule that unnecessarily restricts access to credit should be reconsidered.”

Copyright © 2015 The Washington Times, LLC. Click here for reprint permission.

Inspector General: CFPB Must Increase Database Security

August 17th, 2015 by

According to a post by Dean Chambers of the security of the CFPB’s consumer complaint database has been weighed and measured and found to be lacking. this is his article:

Inspector General: CFPB Must Increase Database Security

Posted: August 1, 2015

A Federal Reserve Inspector General has recommended enhanced security over the consumer complaint database created by the Consumer Financial Protection Bureau (CFPB), Law360 has reported. The Inspector General released results of an audit and concluded additional security measures should be implemented.

“The CFPB, which does not have its own dedicated inspector general’s office, has taken steps toward securing its complaint database in line with federal law, but should address several security deficiencies related to password security, user access requirements and timely patches, the IG’s office said Thursday,” Law360 reported.

The CFPB processed 23,400 consumer complaints in June of 2015. The Inspector General was assigned the task of determining if the complaints database is secure.

The agency released the first “snapshot” based on that consumer complaints database, HousingWire reported. The 23,400 consumer complaints included 7,400 related to debt collection while 4,700 were related to mortgages and credit reporting was the subject of 4,300 complaints.

Judicial Watch has reported the issue of the CFPB consumer complaint database and security concerns in asserting the agency is “out of control.” The data-mining operation alleged to be involved in the database poses a threat to the independent of the bankruptcy office, the Washington Examiner reported.

The CFPB has come under criticism for being a heavy-handed regulatory agency, stifling the financial services industries it was created to regulate. The agency has come under fire for proposing regulations that some believe will shut down the small dollar lending industry.

Two members of Congress, Reps. Blake Luetkemeyer (R-MO) and Randy Neugebauer (R-TX), have introduced legislation to reform the agency by placing it under the control of a bipartisan commission that would quite likely rein in the new agency and force it to regulate financial services in a more moderate and balanced manner.

Going even further, Texas Senator Ted Cruz and Rep. John Ratcliffe from the same state, have filed legislation to eliminate the CFPB, the Inquisitr reported. The legislation would eliminate what they called a “runaway agency” that they believe has gone well beyond its intended purpose.

“Don’t let the name fool you, the Consumer Financial Protection Bureau does little to protect consumer,” Cruz said in a statement about the legislation to eliminate the CFPB. “The agency continues to grow in power and magnitude without any accountability to Congress and the people. The only way to stop this runaway agency is by eliminating it altogether.”

What does the Inspector General report say about the CFPB and the security of its consumer complaint database? Is the agency out of control, and in need for reform, and can American citizens trust the CFPB to securely possess and manage sensitive data on millions of financial accounts and transactions? These are questions Congress is considering and the elected representatives should hear from the people from which they represent.

[Photo of CFPB Director Richard Cordray and President Barack Obama from]

CFPB to Mortgage Industry: Get Out of MSAs

August 17th, 2015 by

CFPB to mortgage industry: Get out of MSAs

Industry calls move regulation by enforcement

Trey Garrison
July 31, 2015 3:50PM

“The Consumer Financial Protection Bureau wants mortgage lenders to stop using marketing services agreements, and it’s using the stick rather than the rules process to do so.

Two major players in the mortgage space announced this morning that they are discontinuing marketing activities that depend on MSAs because of regulatory uncertainty, recent interpretations of RESPA, and a generally toxic enforcement environment, and that appears to be exactly what the CFPB wants.”

Regulatory uncertainty, toxic environment drive Wells Fargo, Prospect out of MSAs

Recent RESPA interpretation cited as top concern

Trey Garrison and Ben Lane July 30, 2015 1:52PM

“Two major players in the mortgage space are discontinuing marketing activities that depend on marketing services agreements because of regulatory uncertainty, recent interpretations of RESPA, and a generally toxic environment because of inconsistent Consumer Financial Protection Bureau enforcement.

Prospect Mortgage and Wells Fargo (WFC) today each announced decisions to discontinue MSAs.”

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