Consumer Financial Protection Bureau and Military’s Top Uniformed Lawyers Release Joint Statement of Principles

Partnership Between CFPB and the Offices of the Judge Advocate Generals Will Help Better Protect Servicemembers and their Families from Unlawful Acts and Practices

WASHINGTON—The Consumer Financial Protection Bureau (CFPB) and the Judge Advocate Generals of the United States Army, Marine Corps, Navy, Air Force, and Coast Guard today announced an agreement on a Joint Statement of Principles to provide stronger protections for servicemembers and their families in connection with consumer financial products and services.

The Judge Advocate Generals and the CFPB, among other things, will work together to identify potential violations of federal consumer financial laws and establish a single point of contact within the CFPB’s Enforcement Division that will allow members of the Judge Advocate Generals’ Corps to share information on consumer complaints from servicemembers and military families.  In addition, the Offices of the Judge Advocate Generals and the CFPB – including its Office of Servicemember Affairs and Enforcement Division – will create a formal working group with the goal of achieving a coordinated response to unlawful conduct targeted at servicemembers and their families.

“I have worked for years trying to protect military families from predatory practices and to help raise awareness of the unique financial challenges they face – and I know the Judge Advocate Generals have been on the front lines in each of those fights,”  said Hollister K. Petraeus, CFPB’s Assistant Director for the Office of Servicemember Affairs.  “Servicemembers and their families sacrifice a great deal for our country and they deserve advocates who will use every available resource to protect them from financial threats.  Through this partnership and our other efforts, we will work to make sure that the days of military families being easy targets for predatory practices and unscrupulous lenders are a thing of the past.”

“Too often our Soldiers, Marines, Sailors, Airmen, and Coast Guardsmen are targeted by predatory lenders and they become victims of unfair financial practices,” said the Judge Advocate Generals in a joint statement.  “This agreement recognizes the crucial role financial readiness plays in mission readiness and we look forward to partnering with the Consumer Financial Protection Bureau to vigorously protect servicemembers and their families from unlawful acts or practices by providers of consumer financial products or services.”

The Judge Advocate Generals and CFPB officials met today to discuss the following goals set forth in the Joint Statement:

•Protecting servicemembers and their families from unlawful acts or practices by providers of consumer financial products or services, including through enforcement actions where necessary;

•Creating mechanisms that enable the Offices of the Judge Advocate Generals to provide input on the Bureau’s efforts to improve the marketplace for servicemembers, their families, and law-abiding businesses;

•Finding ways to work together as efficiently and effectively as possible to address concerns raised by servicemembers and their families about consumer financial products or services; and

•Working with other offices in the Department of Defense to support improved financial literacy training for servicemembers and their families.

The Joint Statement of Principles was signed by: Hollister K. Petraeus, Assistant Director for the Office of Servicemember Affairs, Consumer Financial Protection Bureau; Richard Cordray, Assistant Director for Enforcement, Consumer Financial Protection Bureau; Lieutenant General Dana K. Chipman, The Judge Advocate General, United States Army; Major General Vaughn Ary, Staff Judge Advocate to the Commandant, United States Marine Corps; Vice Admiral James W. Houck, The Judge Advocate General, United States Navy; Lieutenant General Richard C. Harding, The Judge Advocate General, United States Air Force; and Rear Admiral Frederick J. Kenney, The Judge Advocate General, United States Coast Guard.

Federal Reserve and FTC issue final rules to implement the credit score disclosure requirements of the Dodd-Frank Act

The Federal Reserve Board (Board) and the Federal Trade Commission (FTC) on Wednesday issued final rules to implement the credit score disclosure requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. If a credit score is used in setting material terms of credit or in taking adverse action, the statute requires creditors to disclose credit scores and related information to consumers in notices under the Fair Credit Reporting Act (FCRA).

The final rules amend Regulation V (Fair Credit Reporting) to revise the content requirements for risk-based pricing notices, and to add related model forms that reflect the new credit score disclosure requirements. The Board is issuing these final rules jointly with the FTC.

The final rules also amend certain model notices in Regulation B (Equal Credit Opportunity), which combine the adverse action notice requirements for Regulation B and the FCRA, to reflect the new credit score disclosure requirements

The rules under Regulations V and B are effective 30 days after the date of publication in the Federal Register, which is expected soon.

For media inquiries, call 202-452-2955.

$1.7 Billion Additional TARP Funds Returned to Taxpayers, Positive Return on TARP Bank Programs Reaches $10 Billion

WASHINGTON – The U.S. Department of the Treasury announced that all of the Troubled Asset Relief Fund (TARP) funds invested in Marshall and Ilsley Corporation (“M&I Bank”) of Milwaukee, Wisconsin have been returned to taxpayers. Today, in connection with its acquisition of M&I Bank, Bank of Montreal (BMO) purchased Capital Purchase Program (CPP) preferred shares totaling $1.7 billion and a related warrant that had been issued to Treasury by M&I Bank and paid accrued dividends on those preferred shares.

In March, Treasury announced that the TARP bank programs turned a profit. Since that time, all further repayments and income through TARP’s bank programs, such as the payment announced today, provide additional positive returns for taxpayers.

With today’s proceeds, taxpayers have now recovered approximately $255 billion from TARP’s bank programs through repayments, dividends, interest, and other income. That exceeds the original financial support Treasury made through those programs ($245 billion) by approximately $10 billion. Treasury currently estimates that bank programs within TARP will ultimately provide a lifetime positive return of approximately $20 billion to taxpayers.

Further details on today’s TARP repayment are included below:

•M&I Bank (Milwaukee, Wisconsin): BMO purchased CPP preferred shares totaling $1.7 billion, purchased warrants to purchase common stock in M&I Bank for $3.3 million and paid accrued dividends totaling $11.9 million. (Total Proceeds Today for Taxpayers: $1.7 billion)

Further information on total payments and other income for taxpayers from TARP’s $1.7 billion preferred share purchase in M&I Bank are included below:

M&I Bank TARP Payments and Income Summary ($ in millions)
Preferred Share Purchase (7/5/11)	$1,715.0
Final Dividend Payment (7/5/11)	$11.9
Warrant Purchase (7/5/11)	$3.3
Previous Dividend Payments (N/A)	$214.6
Total Lifetime Taxpayer Proceeds	$1,944.8
Original Preferred Share Purchase by Treasury	$1,715.0
Positive Return from Taxpayer Proceeds	$229.8

Agencies Issue Guidance on Counterparty Credit Risk Management

The federal bank regulatory agencies today issued guidance to help ensure banking organizations practice effective counterparty credit risk (CCR) management. The guidance, issued by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision, builds on existing supervisory guidance and outlines effective industry practices for CCR management.

CCR is the risk that the counterparty to a transaction defaults or deteriorates in creditworthiness before the final settlement of the transaction.

The guidance is intended primarily for use by banking organizations with large derivatives portfolios, as well as for supervisors as they assess and examine such institutions' CCR management. The guidance emphasizes that banking organizations should use appropriate reporting metrics and exposure limits systems, have well-developed and comprehensive stress testing, and maintain systems that facilitate measurement and aggregation of CCR across the organization. The guidance also includes sound practices for risk control functions including, but not limited to, validating models and systems, ensuring independent risk management and internal audit processes, and managing legal and operational risks.

Treasury: No Change to August 2 Estimate Regarding Exhaustion of U.S. Borrowing Authority

WASHINGTON – Today, Mary Miller, Assistant Secretary for Financial Markets at the U.S. Department of the Treasury, issued the following statement reaffirming the projected date on which the United States will exhaust borrowing authority under the statutory debt limit.

“The Treasury Department continues to project that the United States will exhaust its borrowing authority under the debt limit on August 2, 2011.  Secretary Geithner urges Congress to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner.”

United States Mint Presidential $1 Coin & First Spouse Medal Set™ - Ulysses S. Grant Available July 7

WASHINGTON - Sales of the United States Mint Presidential $1 Coin & First Spouse Medal Set -Ulysses S. Grant will begin on July 7, 2011, at noon Eastern Time (ET).  The set, priced at $14.95, includes an uncirculated Ulysses S. Grant Presidential $1 Coin and a bronze medal bearing the likeness of Julia Grant that is featured on her First Spouse Gold Coin.  The coin and medal are encased in a durable plastic card enhanced with beautiful representations of the President's and first lady's portraits, with issuance information on the back.

Customers may place their orders at http://www.usmint.gov/catalog or at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may place orders at 1-888-321-MINT (6468).  A $4.95 shipping and handling charge will be added to all domestic orders. 

The United States Mint, created by Congress in 1792, is the Nation's sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

Note:  To ensure that all members of the public have fair and equal access to United States Mint products, orders placed prior to the official on-sale date and time of July 7, 2011, noon ET shall not be deemed accepted by the United States Mint and will not be honored.  For more information, please review the United States Mint's Frequently Asked Questions, Answer ID #175.

Obama Administration Releases June Housing Scorecard

WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the June edition of the Obama Administration's Housing Scorecard– a comprehensive report on the nation’s housing market. The latest housing data offer continued mixed signals as home prices turned slightly upward, though showed continued strain from foreclosures and distressed homes. As more homeowners secure mortgage relief, fewer borrowers entered the foreclosure pipeline in June. The full report is available online at www.hud.gov/scorecard.

“The housing data in this month’s Scorecard paint a mixed picture of the housing market, despite growing evidence of progress in the broader economy,” said HUD Assistant Secretary Raphael Bostic. “Last month we saw a slight uptick in home prices and a continued decline in mortgage defaults as our foreclosure prevention programs reach more borrowers upstream in the process.  But we have much more work to do to reach the many households who still face trouble and to help the market recover. That is why this Administration continues to push for effective implementation of our recovery programs as we continue to help homeowners through this crisis.” 

“The Administration remains committed to reaching homeowners who are still struggling so that our country can fully recover from an unprecedented housing crisis,” said Treasury Assistant Secretary for Financial Stability Tim Massad. “The Administration’s programs continue to benefit tens of thousands of additional homeowners every month, while keeping the pressure on mortgage servicers to offer more sustainable assistance to prevent avoidable foreclosures.” 

The June Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including: 

· Fewer homeowners are falling into foreclosure as the Administration continues to push servicers to provide more effective assistance to troubled borrowers. In May, 4.3 percent of mortgages were at least 30 days late – a significant decline from the peak of 5.9 percent seen in 2010. Moreover, seriously delinquent mortgages – those at least 90 days late or in foreclosure – dropped by 22 percent from a high of 1.9 million recorded last year. As new delinquencies decrease across the nation, the number of new homeowners seeking assistance through the Administration’s programs may also decrease.

· The Administration’s recovery efforts have helped millions of families deal with the worst economic crisis since the Great Depression.  Nearly 5 million modification arrangements were started between April 2009 and the end of April 2011. While some homeowners may have received help from more than one program, the total number of agreements offered continues to more than double the number of foreclosure completions for the same period (2.1 million). In May, more than 32,000 additional homeowners received a permanent modification through the Administration’s Home Affordable Modification Program (HAMP); more than 730,000 homeowners across the country have received a HAMP permanent modification to date, reducing their mortgage burden by over $6.8 billion. Even as new delinquencies begin to fall, eligible homeowners entering HAMP have a high likelihood of securing a permanent modification and realizing long-term success - the rate of modifications moving from trial to permanent is up to 71 percent, and the average time to convert from a trial to permanent modification is down to 3 1/2 months.