A group of 15 U.S. Senators has sent a letter to the Federal Reserve’s Inspector General, calling for an investigation of allegedly inadequate CFPB settlements that provided “limited or no restitution to harmed consumers.” The letter cites several examples of companies the Bureau investigated and charged with serious violations that negatively affected consumers and asserts that insufficient consumer restitution was ordered in those cases.
In one instance, a debt collector that allegedly used illegal tactics over the course of several years including threats to sue or arrest individuals who did not pay their debts and misrepresentations that collection agency employees were attorneys was required to pay $36,800 in restitution to consumers and a civil money penalty of $200,000. In that case, only consumers who had complained about the alleged conduct were to receive restitution.
The letter cited other examples of consent orders with companies that had allegedly violated TILA and the CFPA, where the settling companies were required to pay substantial civil penalties without any customer remuneration being ordered despite the presence of alleged violations that, the Senators assert, caused financial losses to consumers.
The letter asks the Inspector General to investigate the CFPB’s application of legal standards for providing consumer restitution, determine the number of consumers excluded from restitution by the Bureau in the cases cited in the letter, and explore the processes within the Bureau for restitution recommendations by staff and approvals/disapprovals of those recommendations by senior personnel.