Consumer Financial Protection Bureau (CFPB)

The Consumer Financial Protection Bureau issued its latest set of Supervisory Highlights and reminded us that “unforeseen” means “unforeseen.”

The CFPB’s regulations generally prohibit reducing a loan originator’s compensation in selective cases. While lower compensation sounds good for consumers, the CFPB asserts that allowing loan originators to decrease their compensation in selective cases is actually

As we previously predicted, the Consumer Financial Protection Bureau (CFPB) has asked the Supreme Court to reverse the recent Fifth Circuit decision finding that the agency’s funding is unconstitutional. In a petition for certiorari filed less than a month after the Fifth Circuit decision, the CFPB asks the Supreme Court to hear the case

In a consequential decision, a panel of the Fifth Circuit Court of Appeals last week ruled that the US Consumer Financial Protection Bureau (“CFPB”) is unconstitutionally funded and that its promulgation of a Payday Lending Rule—and presumably all of its actions—are therefore invalid. Read our summary of the opinion and discussion of its likely implications

On August 10, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule clarifying its position that digital marketers providing consumer financial services companies with customer targeting and advertisement delivery services are subject to the Consumer Financial Protection Act as “service providers.” Critically, the rule takes the position that tech companies offering such marketing

Apparently time flies when you’re Director Chopra of the Consumer Financial Protection Bureau (“CFPB”). On June 17, Director Chopra issued a blog post titled “Rethinking the Approach to Regulations,” indicating that the agency will move toward “simpler and clearer rules” that are easy to understand and enforce. As part of that effort, the

In a ruling with important implications for the Consumer Financial Protection Bureau (Bureau or CFPB), the Ninth Circuit has revived the CFPB’s claims for substantial civil penalties and restitution in a lawsuit that was first filed some seven years ago. In a May 23, 2022 opinion, the court reversed and remanded a district court

On May 9, 2022, the CFPB issued an Advisory Opinion outlining its position that the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, extend beyond applicants seeking credit to include those who have received credit. The 16-page Advisory Opinion lays out the Bureau’s position that the statutory text, legislative purpose and judicial

On May 2, 2022, the Consumer Financial Protection Bureau released the Spring 2022 edition of its Supervisory Highlights (“Supervisory Highlights” or “Report”).  This edition covers examinations completed between July 2021 and December 2021, and notably is the first edition that covers some examinations completed during Director Rohit Chopra’s tenure at the Bureau.

Interestingly, although the Bureau recently has emphasized fair lending and anti-discrimination concerns and the Report itself states that an important goal of the Bureau’s supervisory work “is to foster financial inclusion and racial equity,” this edition does not include any fair lending-related findings.  The Report also does not include any mortgage servicing-related findings despite the Bureau’s recent focus on servicing for borrowers impacted by the COVID-19 pandemic.

Supervisory Observations

The Supervisory Highlights identifies violations of law in nine areas: auto loan servicing, consumer reporting, credit card account management, debt collection, deposits, mortgage origination, prepaid accounts, remittances, and student loan servicing.  As is the Bureau’s common practice, the Report refers to institutions in the plural even if the related findings pertain to only a single institution.

As we point out below, many of the issues discussed in this edition of Supervisory Highlights are issues the CFPB has addressed in other recent editions of Supervisory Highlights or other recent guidance.  Supervised entities should take note of the Bureau’s continued focus on these issues.

  • Auto Loan Servicing. This edition of Supervisory Highlights discusses several violations of the prohibition on unfair, deceptive, or abusive acts or practices (“UDAAPs”) related to auto loan servicing.  Among other things, CFPB examiners identified wrongful repossessions at auto servicers.  According to the Bureau, servicers engaged in unfair acts or practices when they repossessed vehicles after consumers took action that should have prevented the repossession.  Along these lines, the CFPB released a bulletin earlier this year that focused on mitigating the harm of repossession.

In addition, according to the Report, some servicers engaged in a deceptive act or practice in connection with deferrals offered to consumers.  The deferrals at issue were likely to increase consumers’ final payment amounts, and the servicers sent consumers notices stating that their final payment “may be larger.”  In fact, consumers’ final payments often increased dramatically.  The CFPB determined that the “imprecise conditional statements” in the notices the servicers sent to consumers misled consumers about the amount of their final loan payment after the deferral.  In response to these findings, servicers updated their notices and practices.  For example, some servicers included estimated final payment amounts in the deferral notices.
Continue Reading Latest CFPB Supervisory Highlights Cites Violations in Auto Servicing, Consumer Reporting, Debt Collection, and Other Areas

On March 22, 2022, the US Consumer Financial Protection Bureau (CFPB) released a compliance bulletin on “Unfair and Deceptive Acts or Practices That Impede Consumer Reviews.” The bulletin announced that the CFPB would view practices that discourage or hide consumer reviews as unfair or deceptive practices under Sections 1031 and 1036 of the Consumer Financial

In an extraordinary announcement yesterday, the US Consumer Financial Protection Bureau (CFPB or Bureau) unveiled a broad expansion of its supervisory procedures to include examining supervised entities for discriminatory conduct that the agency alleges could constitute unfair practices in violation of the Dodd-Frank Act. Going forward, it appears that every exam for unfair, deceptive or abusive acts or practices (UDAAP) is likely to include an assessment of a company’s antidiscrimination programs as applied to all aspects of all consumer financial products or services, regardless of whether that company extends any credit or would otherwise be subject to the Equal Credit Opportunity Act (ECOA). In recent months, the Bureau has been laser focused on issues of fair lending and racial equity in the consumer credit market, including redlining, pricing and algorithmic bias, among others. With this change, the CFPB will be broadening its racial equity focus to cover every aspect of the consumer financial services sector.
Continue Reading CFPB Announces It Will Seek to Extend ECOA-Like Antidiscrimination Provisions Broadly to All Consumer Finance Activities