The CFPB has released the Summer 2021 edition of its Supervisory Highlights. The report, which contains 48 pages of supervisory observations, discusses the Bureau’s examinations in the areas of auto servicing, consumer reporting, debt collection, deposits, fair lending, mortgage origination and servicing, private student loans, payday lending, and student loan servicing that were completed between January 1, 2020 and December 31, 2020 (which was the last full year of Kathleen Kraniger’s tenure as CFPB Director).
Key findings by CFPB examiners are described below.
Servicers were found to have engaged in unfair practices in violation of the CFPA UDAAP prohibition by:
Servicers were found to have engaged in deceptive practices in violation of the CFPA UDAAP prohibition by representing on their websites that payments would be applied in a specified order (as between principal, interest and fees) and subsequently applying payments in a different order.
Consumer reporting companies (CRCs) were found to have violated the FCRA by:
Auto loan furnishers were found to have violated the FCRA requirement to promptly notify CRCs of furnished information determined to be inaccurate or incomplete by failing to send updated or corrected information to CRCs after making a determination that furnished information was no longer accurate.
Mortgage furnishers were found to have violated the Regulation V requirement to conduct reasonable investigations of direct disputes as a result of maintaining procedures that instructed employees to (1) verify that consumers’ signatures matched the signature on file and, (2) if they did not match, to send a letter to the borrower stating that the information provided in the dispute did not match the furnishers’ records and take no further steps to investigate the dispute. Interestingly, however, the discussion of how the furnishers resolved this issue included the statement that the furnishers adopted policies and procedures to reasonably identify disputes that were “frivolous or irrelevant” because they originated from a credit repair organization.
Debt collection. Debt collectors were found to have violated the FDCPA by:
Financial institutions were found to have violated Regulation E by:
Financial institutions were found to have violated Regulation DD by disclosing to consumers, through automated systems available account balance amount that included potential discretionary overdraft credit and by failing to correctly disclosed on periodic statements the amount of overdraft fees incurred by the consumer during the statement cycle.
Lenders were found to have violated Regulation Z by:
Lenders were found to have engaged in deceptive practices in violation of the CFPA UDAAP prohibition by using:
Servicers were found to have violated Regulation X by:
Servicers were found to have engaged in a deceptive practice in violation of the CFPA UDAAP prohibition by representing to borrowers, who had submitted a repeat loss mitigation application, that they would not initiate a foreclosure until a specified date. However, because repeat loss mitigation applications are excluded from coverage under the loss mitigation procedures and foreclosure protections of Regulation X, foreclosures were initiated prior to the date provided in the communications
Payday lending. Lenders were found to have engaged in deceptive practices in violation of the CFPA UDAAP prohibition by:
Private student loan origination. Entities were found to have engaged in deceptive practices in violation of the CFPA UDAAP prohibition as a result of the net impression created by marketing materials that advertised rates “as low as” X%, disclosed certain conditions to obtain that rate, and omitted that a borrower’s rate would depend on creditworthiness.
Student loan servicing. Servicers were found to have engaged in deceptive practices in violation of the CFPA UDAAP prohibition by providing Federal Family Education Loan Program (FFELP) borrowers inaccurate information about eligibility for the Public Service Loan Forgiveness (PSLF) program. Such practices included: