Washington, D.C. – At this time, the Client Monetary Safety Bureau (CFPB) launched its Supervisory Highlights report on authorized violations recognized through the CFPB’s supervisory examinations within the second half of 2021. The report particulars key findings throughout shopper monetary services.
“Whereas most entities act in good religion to comply with the regulation, CFPB examiners are figuring out regulation violations that result in actual hurt,” stated CFPB Director Rohit Chopra. “We’ll proceed to look at corporations to proactively determine and mitigate dangerous practices earlier than they turn into widespread.”
Underneath the Dodd-Frank Wall Road Reform and Client Safety Act of 2010, the CFPB has the authority to oversee giant banks, thrifts, and credit score unions with belongings over $10 billion and their associates, in addition to sure nonbanks, together with mortgage corporations, non-public scholar lenders, and payday lenders. The CFPB’s supervisory authority additionally covers giant entities in sure markets, together with shopper reporting, scholar mortgage servicing, debt assortment, auto finance, worldwide cash switch, and different nonbank entities that pose dangers to customers.
Supervisory examinations evaluate whether or not corporations are complying with federal shopper monetary regulation. When CFPB examiners uncover issues, they share their findings with corporations to assist them remediate the violations. Usually, corporations take actions to repair issues recognized in examinations. For extra critical violations or when corporations fail to right violations, the CFPB opens investigations for potential enforcement actions.
At this time’s report highlights findings from examinations of practices within the auto servicing, shopper reporting, bank cards, debt assortment, deposits, mortgage origination, pay as you go accounts, and remittances markets.
Wrongful auto repossessions by servicers
As described in a current compliance bulletin, examinations have revealed that some servicers have been partaking in unfair acts or practices by repossessing autos, even after customers took intentional actions to stop repossessions.
The timing of auto repossessions is usually a shock to customers. They usually lose private property when the automobile is repossessed or are unable to carry on to their job because of the lack of transportation. Additionally they incur different vital prices, together with the expense of discovering different transportation, charges associated to repossession, and adverse marks on their credit score reviews.
In sure examinations, examiners discovered that auto servicers engaged in unfairly failing to acquire refunds for debtors for add-on merchandise that now not offered a profit. In different cases, they discovered that auto servicers misled customers in regards to the quantity of their remaining mortgage funds after their regular funds have been deferred as a result of monetary difficulties – largely on account of the COVID-19 pandemic.
Failure by credit score reporting corporations to conduct affordable investigations into disputed money owed
Credit score reporting corporations that assemble and consider data on customers – in addition to entities, resembling banks and servicers, that furnish credit score data – play a significant position in folks’s potential to entry credit score. Credit score reporting corporations are required to adjust to a number of laws to assist guarantee their reporting is truthful and correct.
Underneath the Honest Credit score Reporting Act, when an individual disputes a debt on their credit score report, the credit score reporting corporations should conduct an inexpensive investigation into the accuracy of the data. Examiners, nevertheless, have discovered that the credit score reporting corporations generally fail to conduct these investigations in a well timed method, and so they additionally fail to evaluate and contemplate all of the related proof submitted by customers.
The CFPB launched a report in March that highlighted how the credit score reporting system is used to coerce households and people to pay medical payments that is probably not correct, are being disputed, or might not even be owed. Federal regulation requires credit score reporting corporations to make sure that medical payments reported on customers’ credit score reviews are correct. If furnishers of medical payments are contaminating the credit score reporting system with inaccurate data, the CFPB expects credit score reporting corporations to restrict their entry to the system.
The Client Monetary Safety Bureau is a 21st century company that implements and enforces Federal shopper monetary regulation and ensures that markets for shopper monetary merchandise are truthful, clear, and aggressive. For extra data, go to consumerfinance.gov.
