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CFPB Set to Assume RESPA Violation Cases

Following two major settlements related to RESPA violations, the Department of Housing and Urban Development (HUD) will transfer more than 1,500 open cases to the Consumer Financial Protection Bureau (CFPB) with their official launch next week.

The two settlements focused on improper payments or kickbacks paid by companies in exchange for referrals in direct violation of RESPA rules.  HUD reached settlement agreements with Fidelity National Financial settled for $4.5 million, followed by a $3.1 million settlement with Prospect Mortgage.

The transfer of the open cases will include the transfer of 37 HUD employees to the CFPB when the new agency launches on July 21. 

In a subcommittee hearing before the House Oversight and Government Reform Committee, Elizabeth Warren reiterated the CFPB's commitment to enforcement, "More than half of our resources will go to supervision and enforcement of financial institutions, to make sure that there’s a cop on the beat and that everyone’s following the rules,”  

The new agency is building up steam towards the official opening of their doors.  Earlier this week, the CFPB announced plans for the examinations of large banking institutions to begin immediately upon opening.  Also, the bureau has been working through a mortgage disclosure reform draft process that has been calling on industry and consumer participants to comment and help shape the process. The goal of that project is to simply the Good Faith Estimates and Truth in Lending disclosures into a single, easy to understand disclosure that will help consumers more easily compare different offers.

The agency is still without an official director as the White House has yet to select a nominee for the post.  Warren, given a role as Special Advisor to the Treasury, has been tasked with setting up the agency and has been acting as a de facto head absent an official director. 

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