CFPB Office of Servicemember Affairs issues 2020 Annual Report

Ballard Spahr LLP

Ballard Spahr LLP

On May 6, 2021, the CFPB’s Office of Servicemember Affairs issued its eighth annual report summarizing its activities from January 1 through December 31, 2020.  The report discussed the Office’s consumer outreach and educational efforts, servicemember complaint trends, and priorities for 2021.

The Office’s educational outreach focused on specific economic challenges and resources related to the COVID-19 pandemic, including forbearance programs and emergency grants. The Office also enhanced its flagship interactive financial educational program, titled “Misadventures in Money Management,” to add a specific military family learning module.  The program is free and available for use by all military personnel, including National Guard and Reserve members.

The Report also offered an analysis of complaints received from servicemembers. In 2020, the CFPB received over 40,800 complaints from servicemembers, a 14% increase over 2019.  The most common complaint categories concerned credit reporting, debt collection and mortgages.  Credit reporting was the top concern for servicemembers, with 16,600 complaints.  The vast majority of complaints related to inaccurate reporting or inadequate investigation of a dispute.  The CFPB opined that the volume of complaints may be partially due to the fact that security clearances require routine credit checks.

The CFPB received 8,900 complaints related to debt collection, over half of which concerned claims of identity theft.  The Bureau noted that servicemembers submit debt collection complaints at a higher rate than non-servicemembers. Another debt collection issue concerned leased telecommunications equipment, such as internet, phone and cable equipment.  This is an issue that uniquely impacts servicemembers due to deployment and frequent relocations.

Of the 4,300 mortgage complaints received, the most common issue was difficulty with the payment process.  Additionally, the CFPB noted that it continued to receive complaints from borrowers who received mailers about refinancing their VA loans, some of which were designed to look like official government communications.  The CFPB brought nine enforcement actions in 2020 against lenders allegedly engaged in similar activity in violation of the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z (see our blog posts hereherehere, and here).

Looking ahead to 2021, the Report outlines the CFPB’s priorities, none of which are a surprise, as they are similar to the broader policy initiatives outlined by the CFPB’s new leadership.  First, the Office intends to continue to closely monitor MLA complaints.  This is consistent with the Bureau’s change in position regarding its authority to supervise creditors for MLA compliance and Acting Director Uejio’s blog post announcing that MLA compliance would be a significant focus going forward.  Second, COVID-19 relief will also be a key area of focus.  Finally, the Office will also work to address economic and racial inequality.  While this is a broader focus for the CFPB, it is a particular concern for servicemembers and their families, given that 31% of active duty servicemembers identify as a racial minority.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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