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

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

So what happened at the CFPB last month?

Bite #10 – The CFPB provided information in Spanish.

To help financial institutions better support Spanish-speaking communities, the CFPB has unveiled Spanish translations of the following federal disclosure templates: Prepaid Card Template Forms, Notice of Sample Adverse Action, Home Loan Origination Documents , early intervention clauses for mortgage officers, credit report notice and the lawsuit model validation notice.

Bite #9 – The CFPB has announced that it will make review information public and review other companies that pose risks to consumers.

The CFPB has announced two review changes: one to make review information public and the other to announce that it will be reviewing additional organisms that pose risks to consumers. The first review-related change is a new procedural rule, effective immediately, that gives the Director the power to make final review decisions public. The CFPB will accept comments for 30 days and may modify the rule if they receive comments justifying a change. The CFPB highlighted the public’s interest in transparency and the ability to use orders as precedent.

The CFPB also announced that in addition to its power to review large banks, mortgage companies, student loan companies, payday lenders and major players in the financial system, it now plans to review other organizations that pose risks to consumers. The CFPB has announced that it is seeking public comment on a rule of procedure to make this process more transparent.

Bite #8 – The CFPB has expanded its enforcement office.

The CFPB’s Office of Enforcement has been authorized to add 20 additional staff, most of whom will be lawyers, as part of the agency’s most recent budget process. Offers have already come out for a dozen lawyers. The additional hires will bring CFPB’s operational workforce to approximately 200 full-time employees. The CFPB said the authorization of 95 additional positions had been approved in the budgeting process, including line positions.

Bite #7 – The CFPB has released its Spring Watch Highlights.

Highlights from the CFPB’s spring monitoring reported results of reviews in the areas of auto care, consumer reporting, credit cards, debt collection, deposits, granting mortgages, prepaid accounts and remittances.

According to the CFPB, some repairers unfairly repossessed vehicles even after consumers took action to prevent the repossession. The reviewers also found that auto repairers failed to obtain refunds for borrowers for add-on products that no longer offered benefits. In other cases, they’ve found auto repairers misleading consumers about their final payment amounts after their normal payments were delayed due to financial hardship — largely due to the COVID-19 pandemic.

The CFPB also said 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. Similarly, the CFPB reported that private student loan servicers were not adhering to the terms of their own loans, modifications or incentives.

Bite #6 – The CFPB has issued guidelines regarding misrepresentation regarding FDIC insurance.

The CFPB has issued an enforcement memorandum addressing misrepresentations regarding Federal Deposit Insurance Corporation (FDIC) insurance. According to the CFPB, misusing the FDIC name or logo, falsely advertising deposit insurance, or making material misrepresentations to the public about deposit insurance is an act or a deceptive practice. The CFPB said such misrepresentations harm honest consumers and organizations.

This announcement is part of a new CFPB effort to provide guidance to other agencies with consumer financial protection responsibilities on how the CFPB intends to enforce federal consumer finance law. . The CFPB has announced that it will make available to the public 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. Law enforcement officials and the general public may provide feedback and feedback to [email protected]

Bite #5 – The CFPB has issued an advisory opinion on the coverage of Fair Lending Laws.

The CFPB has issued an advisory 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 notice states that the ECOA continues to protect borrowers after they apply for and receive 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 draft order to resolve its allegations that certain parties engaged in abusive billing practices and deceptive telemarketing. The parties involved included a student loan debt relief company, a debt settlement company, their owner and a CEO. The CFPB alleged that the student debt relief company illegally collected upfront payments from borrowers and failed to provide mandatory disclosures. The CFPB alleged that the debt settlement company settled debts without consumers’ permission and tricked consumers into signing up for its services. The judgment will permanently ban the student debt relief company from debt relief services, ban the CEO from debt relief services for five years, permanently ban the general debt settlement company from debt to obtain references from companies claiming to make or arrange loans, ban the general debt settlement company from certain loan settlement and lead generation activities, and force the CEO to pay a $30,000 penalty at CFPB.

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

The CFPB and the New York Attorney General filed a lawsuit against one of the largest money transfer providers in the United States, alleging that the money transfer provider systematically and repeatedly violated various privacy laws. consumer financial protection. The lawsuit claims the company blocked customers waiting for money, failing to quickly deliver funds to recipients. In 2009, 2012 and 2018, the same company previously agreed to settlements with federal agencies. The complaint seeks monetary relief for consumers, an injunction to end future violations, and the imposition of monetary civil penalties. The complaint is not a final finding or determination that the defendants violated the law.

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

The CFPB announced a resolution of $11 million in claims under the Telemarketing Sales Rule and the Consumer Financial Protection Act. The CFPB claimed that debt relief payment processors and two individuals collected inappropriate fees, misled consumers about paying fees, sent fee advances prematurely, and failed to return funds to consumers who had canceled debt relief agreements. The respondents neither admitted nor denied the allegations, but granted injunctions and remedies for certain individuals, the payment of $8 million in restitution and the payment of a fine of $3 million.

Bite #1 – The CFPB ordered one of America’s largest banks to pay a $10 million fine for allegedly illegal garnishments.

The CFPB has concluded a lawsuit against a major bank for allegedly processing illegal out-of-state garnishment orders on its customers’ bank accounts. According to CFPB allegations, customer accounts unlawfully froze, charged garnishment fees, seized funds and sent payments to creditors. The CFPB says 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 violated the law by inserting unfair and unenforceable language into customer contracts that purported to limit customers’ rights to challenge garnishments. The CFPB order requires the bank to repay at least $592,000 in garnishment costs to aggrieved consumers, fix its broken garnishment process, remove unenforceable terms from its contracts and pay a $10 fine. millions of dollars.

Reports too. Besides all these stings, the CFPB has released reports dealing with financial challenges facing rural communities, medical billing issues, CFPB Equal Employment Opportunity Program, Fair Lending Report 2021 and servicing mortgages.

Always hungry?

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

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