On May 16, the CFPB released a report examining metrics on mortgage servicers’ responses to the COVID-19 pandemic.  According to the report, homeowners are still facing significant risks and challenges in working with mortgage servicers, particularly borrowers struggling with mortgage payments after their COVID-19 hardship forbearances and other protections under the CARES Act have expired.
Continue Reading CFPB Report on Mortgage Servicers Examines Industry Responses After Pandemic Protections End

On May 17, the FDIC and the CFPB took parallel actions to combat the misuse of  the name or logo of the FDIC and deceptive representations about deposit insurance.  The FDIC approved a final rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.  The CFPB followed suit by releasing Consumer Financial Protection Circular 2022-02 providing that company’s likely violate the CFPA’s prohibition on deception acts or practices if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly.
Continue Reading FDIC and CFPB Take Action to Protect Against Misrepresentations about FDIC Insured Status and Misuse of Name and Logo

On May 9, the CFPB released an advisory opinion affirming that ECOA and its implementing rule, Regulation B, protect not only those persons actively seeking credit, but also those who have sought and received credit.  The CFPB stated in the opinion that “[d]espite this well-established interpretation, the Bureau is aware that some creditors fail to acknowledge that ECOA and Regulation B plainly apply to circumstances that take place after an extension of credit has been granted, including a revocation of credit or an unfavorable change in the terms of a credit arrangement.”  In addition, the Bureau states that it is “aware that some creditors fail to provide applicants with required notifications that include a statement of the specific reasons for the adverse action taken or disclose an applicant’s right to such a statement.”
Continue Reading CFPB Affirms that ECOA Protects Consumers After Receiving Credit

In March, U.S. Department of Treasury issued its annual General Explanations of the Administration’s Revenue Proposals, commonly known as the “Green Book.”  Among other revenue proposals, the Treasury addressed the treatment of on-demand pay arrangements or earned wage access (EWA) programs, which have risen in popularity in recent years (previously discussed in our Labor and Employment Blog).  EWA programs generally allow employees to access accrued wages before the end of their regular pay cycle.
Continue Reading Treasury Department Proposes Non-Loan Status for Earned Wage Access

On April 29, the CFPB filed a proposed order in federal court seeking final judgment against three California-based defendants for engaging in unlawful fee-charging practices and deceptive telemarketing. According to the complaint, the defendants, a student loan debt relief business and a general debt-settlement company, along with their owner and CEO charged illegal upfront fees and deceived customers into paying for debt relief services in violation of the Consumer Financial Protection Act (CFPA) and Telemarking Sales Rule (TSR).  The CFPB alleges that defendants wrongfully charged more than 9,000 consumers with federal student-loan debt a total of approximately $10.5 million in illegal upfront fees, and used deceptive sales tactics to lure consumers into signing up for certain debt-relief services.  If approved by the court, defendants would be banned from performing debt relief and settlement activities.  The CEO would also be require to pay a civil monetary penalty of $30,000.
Continue Reading No Relief in Sight: CFPB and FTC Continue to Take Action Against Debt Settlement Companies

On May 2, the CFPB released its Spring 2022 Supervisory Highlights. The findings of the report, which generally cover examinations completed between July and December 2021, are issued to help institutions and the general public better understand how we examine institutions for compliance with Federal consumer financial laws.  Highlights include the following findings:
Continue Reading CFPB Issues Spring 2022 Supervisory Highlights

On May 2, the CFPB published a blog post demonstrating its commitment to “a fair, transparent, and competitive auto lending market” by calling attention to add-on products for which auto dealers and finance companies “often charge consumers all payments for any add-on products as a lump sum at origination of the auto loan, and they generally include the lump sum cost as part of the total vehicle financing agreement.”  CFPB examiners have focused on how servicers manage these add-on product charges when the loan ends prior to when the add-on product’s potential benefits end.
Continue Reading CFPB Blog: Stop Overcharging for Auto Loan Add-on Products

On April 25, the CFPB announced that it is using its “dormant authority” in order to conduct examinations of nonbanks posing risks to consumers.  The Bureau has direct supervisory authority over banks and credit unions, certain nonbanks, in addition to large depository institutions with more than $10 billion in assets, and their service providers.  With this announcement, the CFPB intends invoke its authority under the Dodd-Frank Act to examine nonbanks “whose activities the CFPB has reasonable cause to determine pose risks to consumers. This authority is not specific to any particular consumer financial product or service.”
Continue Reading FinTechs in Crosshairs as CFPB Invokes Dormant Authority to Examine Nonbanks

On April 21, the CFPB and New York Attorney General’s Office filed a complaint against a remittance provider alleging that the provider (i) repeatedly gave senders inaccurate information about when their remittance transfers would be available to recipients abroad; (ii) repeatedly failed to provide the investigations, responses, or remedies required when consumers complained of remittance-transfer errors; and (iii) failed to comply with policy-and-procedure and document-retention requirements.  The complaint also alleges that the company engaged in unfair acts and practices by failing to timely make remittance transfers available to recipients or to timely make refunds available to senders. The complaint alleges that the these actions violated the Electronic Funds Transfer Act and its implementing Regulation E and the Remittance Rule and the Consumer Financial Protection Act, among various consumer financial protection laws.
Continue Reading CFPB and NY AG Sue Remittance Provider, citing “Repeat Offender”

This week, CFPB Director, Rohit Chopra, appeared before the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Committee on Financial Services in conjunction with the CFPB’s submission of its Semiannual Report to Congress.  In his prepared testimony before both committee, the Director highlighted some of the CFPB’s work over the past six months, which includes:
Continue Reading CFPB Director Testifies Before Congress

On April 15, the CFPB and FTC announced the release of a joint annual report to Congress administering the Fair Debt Collection Practices Act (FDCPA).  The annual report highlights both agencies’ efforts to protect and provide debt collection relief to consumers, particularly in light of the COVID-19 pandemic and resulting economic hardship.
Continue Reading CFPB Signals Foray into Protecting Small Businesses from Abusive Debt Collectors