CFPB Nearly Doubled Caseload in 2015

The Consumer Financial Protection Bureau roughly doubled the number of enforcement cases it brought last year as the federal watchdog stepped up its scrutiny of industries including credit cards, auto lending and debt collection, the Wall Street Journal reported on Tuesday. CFPB officials said that in 2015, the bureau handled 59 cases in which companies settled allegations of wrongdoing and 11 cases that led to lawsuits. That compares with 23 settlements and 11 lawsuits for 2014, and 21 settlements and seven lawsuits for 2013. The sharp increase reflects the growth in the number of investigators, examiners and administrative staff, as well as the maturing of the bureau's practices and policies four years after it was established under the Dodd-Frank financial overhaul law, said Tony Alexis, the CFPB's director of enforcement. (Subscription required.)

For more on the CFPB and why it is considered the most powerful regulator in consumer finance, be sure to watch this video featuring ABI Executive Director Sam Gerdano speaking with Alane Becket of Becket and Lee and Joann Needleman of Clark Hill PLC, who both contributed to the December 2015 ABI Journal article, "What Is the CFPB, and Why Should You Care? The Bureau's Reach Extends Beyond Consumer Advocacy."

Deutsche Bank Said to Probe Sales of Subprime Auto Securities

Deutsche Bank AG officials are reviewing whether some employees exaggerated demand as they marketed new securities backed by risky auto loans, potentially suppressing yields for investors, Bloomberg News reported today. The bank has looked at communications between the employees and investors to determine whether such marketing practices were normal salesmanship or if they crossed a line. The lender has also looked at whether preferential treatment in the allocation of the bonds may have improperly given the biggest investors a leg up over smaller firms. The bank's inquiry comes as the U.S. Securities and Exchange Commission expands an industrywide crackdown on trading and sales practices in markets where mortgages, auto loans and other debt are bundled into securities. It's also raising new questions in the booming market for subprime auto-loan securities that some regulators have likened to the mortgage-bond binge of the 2000s.

SEC Reviews High-Yield Funds Following Third Avenue Bond Fund Collapse

U.S. securities regulators launched a review of potential liquidity risks posed by high-yield bond fund managers in the aftermath of the collapse of Third Avenue's junk bond fund in December, Reuters reported yesterday. The Dec. 9 collapse of Third Avenue's Focused Credit Fund marked the biggest mutual fund failure since the 2007-09 financial crisis. It was sparked after heavy losses in the junk bond sector left the fund unable to meet a wave of demands by investors to withdraw their money. The event has heightened regulators' concerns about how mutual funds manage their liquidity risks and the impact that such disruptions can have, both on fund shareholders and the broader marketplace. Within weeks of the Third Avenue event, examiners at the Securities and Exchange Commission sent detailed requests to mutual funds and exchange-traded funds seeking information about how they price less-liquid securities, and whether certain parties have ever challenged those prices. The SEC specifically requested daily internal illiquidity calculations from Aug. 31 through Dec. 15.

Commentary: Indirect Pressure from Regulators Factoring in Breakup of Some Financial Firms

Insurer MetLife Inc. on Tuesday became the second major firm in the past 10 months to decide that the demands of being "systemically important" in the eyes of regulators may outweigh the benefits of continuing to operate at its current size, according to a Wall Street Journal commentary today. General Electric Co. made the same choice in April for its giant finance arm, GE Capital. The moves show that while the U.S. government hasn't heeded populist calls to "break up" the nation's largest financial firms, those demands are at times being answered through indirect pressure from regulators. Next up could be MetLife rivals Prudential Financial Inc. and American International Group Inc., analysts say. The latter is facing a challenge from investors, including Carl Icahn, who argue in part that the firm is "too big to succeed" given the regulatory requirements it must now meet that restrain profits.

Don't Miss the Insights and Analysis of Important Case Decisions with Rochelle's Daily Wire

ABI Editor-at-Large Bill Rochelle provides his exclusive perspectives and analyses of important case decisions. New summaries appearing on today's Daily Wire include:

- New York's "Loss Mitigation" Program Survives One Lender Attack

- Committee Counsel Fees at 56 Percent Are Ok in Delaware

- How the Bankruptcy Code Determines the Winner of a Bar Fight

Tap into Rochelle's Daily Wire via the ABI Newsroom, Daily Headlines e-mail and Twitter!

USTP Announces Notice of Public Hearing and Reopened Comment Period for Proposed Procedures for Completing Uniform Periodic Reports in Non-Small Business Cases Filed Under Chapter 11 of Title 11

The U.S. Trustee Program (USTP) on Nov. 10 published in the Federal Register a notice of proposed rulemaking (NPRM) seeking public comment on the proposed rules requiring uniform periodic reports by debtors-in-possession or trustees in non-small business cases under chapter 11 and the proposed periodic report forms. After analyzing the comments to the NPRM and proposed forms, and because certain public commenters asked to meet with representatives of the USTP to discuss the NPRM and proposed forms, the USTP has decided to hold a public hearing on Feb. 17, 2016, from 10:00 a.m. to 1:00 p.m. ET in the Executive Conference Center in the Executive Office for U.S. Trustees in Washington, D.C. The hearing on the NPRM will provide an opportunity for interested parties to express their views directly to USTP officials. The USTP has also reopened the comment period and will accept new and supplemental comments from the public on or before Feb. 22, 2016, via www.regulations.gov. Those who register to attend and make a presentation at the public hearing must have either a written comment or statement on file by the registration deadline of Jan. 6, 2016. For more information, please click here.