On May 9, the CFPB issued a new report highlighting the issues consumers encounter with credit card rewards programs. The report was released in conjunction with a hearing co-hosted with the Department of Transportation and featured remarks from Director Chopra and Secretary of Transportation Pete Buttigieg, along with panelists from consumer groups, policy advocacy organizations, financial institutions, and airlines. Chopra, in particular, noted the lack of transparency in the rewards market and how many card issuers engage in bait-and-switch scams. As described in further detail in the report, the Bureau found the following issues with rewards programs;Continue Reading CFPB Targets Credit Card Rewards Programs

On May 6, 2024, the CFPB resolved an enforcement action against a group of Delaware student loan trusts and a loan servicer (found here and here) for their failures to adequately respond to borrowers’ requests for relief, including during the COVID-19 pandemic. When entered by the court, the stipulated final judgments will require defendants to pay almost $3 million in redress to borrowers, and pay a fine of $2.15 million.Continue Reading CFPB Settles Action Against Student Loan Servicer and Securitization Trusts

On April 25, the FTC took action against a Washington-based bill payment company and its two co-founders alleging that the company used misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead those consumers into paying “junk fees” they tacked on to consumers’ bills. Continue Reading FTC Calls Out Bill Payment Company’s Use of Dark Pattern Practices

On May 1, the FTC announced a settlement in federal court in the Northern District of Georgia against a payment processing company, along with its former CEO and senior vice president, for the company’s role in handling transactions for a debt-relief company engaging in fraud. The defendants have agreed to a settlement that includes a $10 million payment to compensate affected consumers and tighter restrictions on future business operations.Continue Reading FTC Cracks Down on Payments Processor for Facilitating Fraud

In an April 16 unpublished opinion, the U.S. Ninth Circuit Court of Appeals affirmed the Bankruptcy Appellate Panel’s earlier decision finding that a mortgage lender not licensed in California violated the state’s usury law when it extended the term of the loan and lowered the borrower’s interest rate on a broker-arranged mortgage loan that it owned. Continue Reading Ninth Circuit Holds Loan Modification Made By Unlicensed Lender Violates State Usury Law

On April 24, the CFPB released its latest edition of Supervisory Highlights detailing the agency’s actions taken to combat “junk fees” it alleges are charged by mortgage servicers. This spotlight on fees in mortgage servicing marks a continuation of previous CFPB exam work on the agency’s ongoing efforts to combat excessive fees affecting consumers in personal banking, student and auto loans in addition to mortgage servicing.Continue Reading CFPB Announces Update in Continued War on Mortgage Servicing Junk Fees

On April 17, the CFPB issued a consent order against a San Francisco-based for-profit coding school and its and CEO, banning it from lending to consumers, after it found that the company inflated its job placement rates to students and deceived them about a tuition financing program. Continue Reading CFPB Fines and Bans Coding Bootcamp over Deceptive Student Lending Practices

On March 28, the Federal Reserve (Fed) issued a cease-and-desist order to a Wyoming-based bank holding company, citing deficiencies identified in a September 2023 inspection related to its “fintech business strategy, board oversight, capital, earnings, liquidity, risk management, and compliance” in connection with the banking-as-a-service activities of its bank subsidiary. Continue Reading Fed Brings Enforcement Action Against Wyoming Bank Holding Company Over “Fintech Business Strategy”