On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. Created to address the recent financial crisis, part of the Dodd-Frank Act established a new bureau focused on consumer protection within the financial markets. A year later, the Consumer Financial Protection Bureau (CFPB) became operational with a far-reaching jurisdiction over many financial companies. CFPB has begun its examinations while also issuing notices revising and reinterpreting current regulations. Many of these notices pay special focus to “lender-placed insurance,” a little-known and historically underserved niche in the insurance industry.
Agents representing financial companies must be aware of the impact CFPB's changes have on their customers. Consider the CFPB's Supervision & Examination Manual issued in October 2011. Mortgage servicing accounts for roughly 30 pages of this 800-page tome. Buried in Module 4 (Maintenance of Escrow Accounts and Insurance Products) is a single question that may impact how servicers, including community lenders like banks and credit unions, obtain lender-placed coverage:
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