CFPB Bites of the Month – May Top 10 | Hudson Cook, LLP


In this month’s top 10 article, we share some of our top “bites” from the previous month covered during the May 18th webinar.

So what happened at the CFPB last month?

Tip #10 – The CFPB provided disclosures in Spanish.

To help financial institutions better support Spanish-speaking communities, the CFPB has released Spanish translations of the following federal disclosure templates: Prepaid Card Template Forms, Sample Adverse Action Notices, Origination Documents for home mortgages, early intervention provisions for mortgage servicers, credit report notifications, and the debt collection model validation notice.

Tidbit #9: The CFPB announced that it will make the examination information public and will examine additional businesses that present risks to consumers.

The CFPB announced two review changes: one to make the review information public and the other to announce that it will review additional organizations that pose risks to consumers. The first exam change refers to a new procedural rule, effective immediately, that gives the Director the authority to make public the final exam determinations. The CFPB will accept comments for 30 days and may modify the rule if it receives comments justifying the change. The CFPB highlighted the public interest in transparency and the opportunity to use the orders as precedent.

The CFPB also announced that, in addition to its authority to examine large banks, mortgage companies, student loan companies, payday lenders and larger participants in the financial system, it now plans to examine additional organizations that pose risks to consumers. The CFPB announced that it was seeking public comment on a procedural rule to make this process more transparent.

Tip #8 – The CFPB expanded its Compliance office.

The CFPB Office of Compliance has been authorized to add an additional 20 employees, the majority of whom will be attorneys, as part of the agency’s most recent budget process. There are already offers for about 10 lawyers. The additional hires will bring the CFPB’s compliance headcount to about 200 full-time employees. The CFPB said authorization for an additional 95 positions had been approved in the budgeting process, including execution positions.

Tip #7 – The CFPB issued its Spring Monitoring Highlights.

The CFPB’s Spring Supervisory Highlights reported examination findings in auto service, consumer reports, credit cards, debt collection, deposits, mortgage origination, prepaid accounts and remittances.

According to the CFPB, some servicers wrongfully repossessed vehicles even after consumers took steps to prevent the repossession. The evaluators also found that auto service providers unfairly failed to obtain reimbursements for borrowers for ancillary products that no longer provided a benefit. In other cases, they found that auto service providers misled consumers about the amount of their final loan payments after their normal payments were deferred due to financial hardship, largely as a result of the COVID-19 pandemic. 19.

The CFPB also stated that credit reporting companies failed to conduct reasonable investigations into disputed debts in a timely manner and failed to review and consider all relevant evidence submitted by consumers. In addition, the CFPB indicated that private student loan servicers failed to comply with the terms of their own loans, modifications or incentives.

Tidbit #6 – The CFPB has issued guidance addressing false FDIC insurance claims.

The CFPB published an enforcement memorandum addressing false claims related to Federal Deposit Insurance Corporation (FDIC) insurance. According to the CFPB, it is a deceptive act or practice to misuse the FDIC name or logo, falsely advertise deposit insurance, or make false statements to the public about deposit insurance. The CFPB indicated that such misrepresentations harm consumers and honest organizations.

This announcement is part of a new effort by the CFPB to provide guidance to other agencies with consumer financial protection responsibilities on how the CFPB intends to enforce federal consumer financial law. The CFPB announced that it will issue publicly available Consumer Financial Protection Circulars to state attorneys general and state regulators, as well as federal financial regulators such as the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the National Credit Union Administration of credit. Law enforcement officials and the general public can provide comments and feedback to [email protected]

Tip #5 – The CFPB issued an advisory opinion on the coverage of fair lending laws.

The CFPB published a advisory opinion confirming that the Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against customers after they have received a loan, not just during the application process. The advisory opinion states that ECOA continues to protect borrowers after they have applied for and received credit and that it requires lenders to provide “adverse action notices” to borrowers with existing credit.

Bite #4: The CFPB banned a debt relief CEO from debt relief services for 5 years.

The CFPB filed a proposed order to resolve its allegations that certain parties engaged in improper fee-charging and deceptive telemarketing practices. The parties involved included a student loan debt relief business, a debt settlement company, its owner, and a CEO. The CFPB alleged that the student loan debt relief company illegally collected advance payments from borrowers and failed to provide required disclosures. The CFPB alleged that the debt settlement company settled the debts without the consumer’s authorization and misled consumers into signing up for its services. Ruling Will Permanently Ban Student Loan Debt Relief Company From Debt Relief Services, Ban CEO Of Debt Relief Services For Five Years, Permanently Ban General Debt Settlement Company obtain referrals from companies purporting to make or arrange loans, prohibit the general debt settlement company from certain loan settlement and lead generation activities, and require the CEO to pay a $30,000 fine to the CFPB.

Bite #3 – The CFPB & NY AG sued a remittance provider.

The CFPB and the New York Attorney General filed a complaint against one of the largest remittance providers in the US alleging that the remittance provider systematically and repeatedly violated various consumer financial protection laws. The lawsuit claims the company stranded customers waiting for the money and failed to immediately deliver the funds to recipients. In 2009, 2012 and 2018, the same company had reached agreements with federal agencies. The lawsuit seeks monetary compensation for consumers, an injunction to stop future violations, and the imposition of civil money penalties. The lawsuit is not a final ruling or determination that the defendants have violated the law.

Bite #2: The CFPB ordered debt relief payment processors to pay over $11 million.

The CFPB announced an $11 million settlement of claims under the Telemarketing Sales Rule and the Consumer Financial Protection Act. The CFPB claimed that debt relief payment processors and two individuals charged improper fees, misled consumers about paying fees, sent advance fees ahead of time, and failed to return funds to consumers who canceled relief agreements. Of the debt. The defendants neither admitted nor denied the allegations, but consented to injunctive and corrective measures for certain individuals, the payment of $8 million in restitution, and the payment of a $3 million fine.

Bite #1: The CFPB ordered one of the largest banks in the US to pay a $10 million fine for alleged illegal repossessions.

The CFPB concluded an enforcement action against a large bank for allegedly processing illegal out-of-state garnishment orders against its customers’ bank accounts. According to the CFPB’s allegations, they illegally froze customer accounts, collected garnishment fees, garnished funds, and sent payments to creditors. The CFPB asserts that those payments were based on out-of-state garnishment orders that should have been processed under the laws of the states where the consumers lived. The bank also allegedly broke the law by inserting unfair and unenforceable language into customer contracts that was intended to limit customers’ rights to challenge garnishments. The CFPB order requires the bank to refund at least $592,000 in garnishment-related fees to harmed consumers, fix its broken garnishment process, remove unenforceable clauses from its contracts and pay a $10 million penalty.

Reports too. In addition to all of these Bites, the CFPB issued reports addressing: financial challenges facing rural communities, medical billing challengesthe CFPB Equal Employment Opportunity Programthe 2021 Fair Lending ReportY mortgage service.

Still hungry?

Join us for our upcoming CFPB Bites of the Month: Summer Solstice Monitoring on June 15. If you missed any of our previous Bites, request a replay on our website.


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