On June 28, the FTC announced it had filed an action in federal court against a California-based student debt relief enterprise for deceptive practices, including unlawfully obtaining advance fees for debt relief, and pretending to be affiliated with the Department of Education for engaging new customers. The U.S. District Court for the Central District of California entered a temporary restraining order on June 24 against the defendants.Continue Reading FTC Files Action Against Student Debt Relief Enterprise

An Oklahoma-based bank has been hit with a consent order from the FDIC after posting significant losses in its first year of operation. On June 28, the FDIC announced that it took an enforcement action against the bank mandating it to increase its capital reserves, revise its business strategy, and implement technology-based audit policies.Continue Reading Oklahoma Bank Faces FDIC Consent Order

On June 25, the CFPB issued its annual fair lending report covering its fair lending activity in 2023. The Bureau noted that in 2023 it undertook 28 fair lending examinations and announced four enforcement actions. It separately referred 18 matters to the Department of Justice. Continue Reading Key Takeaways from the CFPB’s 2023 Fair Lending Report

On June 14, the Federal Reserve Board (Fed) released a cease and desist order against an Arkansas-based banking-as-a-service (BaaS) provider for compliance and risk management failures. As part of the order, the bank is prohibited, without prior approval, from (i) establishing any new fintech partners, subsidiaries, business lines, products, programs, services, or program managers, or (ii) offer new products, programs, or services to an existing fintech partner, program manager, or subsidiary.Continue Reading Federal Reserve Board Issues Cease and Desist Order Against Banking-As-A-Service Provider

On June 24, the OCC, Federal Reserve Board, FDIC, NCUA, CFPB, and FHFA approved a final rule to implement the quality control standards mandated by the Dodd-Frank Act to address the use of artificial intelligence in estimating home values. The Bureau noted that over the years, the real estate and mortgage industry have made use of computer models to estimate a property’s value. As these AI-based models grow in complexity and include more variables, they can produce inaccurate or discriminatory results.Continue Reading Federal Regulators Finalize Rule Enacting Safeguards for AI-Driven Home Valuations

On June 17, the Consumer Financial Protection Bureau filed an order to resolve its 2023 lawsuit against the former CEO of a short-term small dollar lender and his spouse, in connection with a series of fraudulent transfers they utilized to evade the civil penalties imposed by the CFPB against the company.Continue Reading CFPB Takes Action Against Owners of Small Dollar Lender for Hiding Money to Avoid Penalties

On June 18, the CFPB settled enforcement actions (found here and here) against two mortgage servicers who serviced reverse mortgages on behalf of HUD, for their systemic failure to respond to consumer requests for assistance, resulting in financial harm to many elderly borrowers.Continue Reading CFPB Cracks Down on Mortgage Servicers, Alleging Harmful Practices Against Older Homeowners

On June 18, the CFPB filed a proposed final judgment that would require a Florida-based nonbank mortgage originator and servicer to pay a $3.95 million civil money penalty and implement corrective actions requiring the company to audit, test, and correct the company’s HMDA data, which the Bureau alleged was riddled with errors. Continue Reading CFPB Files $3.95M Proposed Order to Settle HMDA Lawsuit Against Florida-Based Mortgage Company

On June 3, the CFPB issued its final rule codifying its “repeat offender registry.” The registry will require certain nonbank entities subject to agency or court orders issued in connection with the provision of a consumer financial product or service, to report the existence of such orders to the CFPB’s public registry.Continue Reading CFPB Final Rule Establishes Registry for Violators of Consumer Finance Laws

On May 31, the CFPB filed suit in federal court in the Middle District of Pennsylvania against a Pennsylvania-based student loan servicer accusing it of illegally pursuing student loan debts discharged in bankruptcy and providing false information to credit reporting agencies. The CFPB’s lawsuit asks the court to order the servicer to stop its illegal conduct, provide redress to borrowers, and pay a civil penalty.Continue Reading CFPB Takes Legal Action Against Student Loan Servicer for Chasing Debt on Discharged Student Loans

On May 16, the CFPB filed a motion for summary judgement in the U.S. District Court in the Southern District of Florida seeking a $20 million civil penalty against a California-based mortgage provider for allegedly submitting inaccurate government mortgage loan data.Continue Reading CFPB Files Motion for Summary Judgment on HMDA Enforcement Action