Last month, the CFPB released the fifth edition of its Supervisory Highlights report describing findings from recent examinations of consumer financial products and services providers.
The report highlighted regulatory violations − or unfair, abusive, or deceptive trade acts or practices (UDAAPs) − in the consumer reporting, debt collection, deposits, mortgage servicing, and student loan servicing industries. Key highlights include the following:
- For the consumer reporting industry, the report primarily addressed agencies’ dispute-handling obligations, including their failure to provide certain information about reinvestigation of consumer disputes related to the completeness or accuracy of information contained in agency files.
- Unsurprisingly, the CFPB maintained its focus on debt collectors and violations of the Fair Debt Collection Practices Act (FDCPA). It observed debt collectors (1) exceeding FDCPA limits on imposing convenience fees, (2) threatening litigation without intent to pursue, (3) permitting disclosure of an employer’s name before receiving a disclosure request, (4) overstating the annual percentage rates in documents provided to debt buyers, and (5) delaying forwarding of payments to appropriate debt buyers.
- In the deposit area, the report noted several violations of Regulation E’s procedures on electronic funds transfers, including (1) violations of error resolution requirements, (2) violations regarding liability for unauthorized transfers, and (3) notice deficiencies.
- With respect to student lending, the report highlighted a number of UDAAPs, including (1) allocation of partial payments to maximize late fees, (2) misrepresentation of minimum payments on billing statements, (3) improperly charged late fees, (4) failure to provide accurate tax information, (5) misrepresentation of rules on discharge through bankruptcy, and (6) improper telephone communications.
In addition, the report offered updated supervisory guidance and identified public enforcement actions addressing regulatory violations.
- On the mortgage front, the report noted the CFPB’s new mortgage servicing rules that went into effect on January 10, 2014. These rules require servicers to maintain certain oversight policies and procedures, but the CFPB observed deficient or, in some cases, nonexistent procedures. The report also addressed misrepresentations and deceptive acts relating to loan modifications and short sales.
- In addition, in January 2014, the CFPB announced a different resubmission standard for any institution reporting 1,000 or more loans on its Home Mortgage Disclosure Act Loan Application Register. The CFPB will continue to follow previous standards in reviewing 2013 and earlier HMDA data, which will allow larger reporters an opportunity to comply with the new standards.
- For larger nonbank participants, the CFPB discussed a final rule in the international money transfer market and a proposed rule expanding supervisory authority in the automobile financing market.
- The report also described CFPB guidance on (1) marketing credit card promotional APR offers, (2) FFIEC credit practices, (3) mortgage servicing transfers, and (4) mortgage transactions involving “mini-correspondent” lenders.