On September 1, 2020, the Consumer Financial Protection Bureau (“CFPB”) announced that it had issued a consent order against a Miami-based lender based on its deceptive advertisements to service members and military veterans through direct-mail campaigns in eight states.
According to the consent order, the CFPB found that the company had included false, misleading, and inaccurate statements in advertisements since 2016, in violation of § 1026.24 of Regulation Z, 12 C.F.R. § 1026.24, the implementing regulation of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601–1667f; § 1014.3 of the Mortgage Acts and Practices—Advertising Rule (MAP Rule or Regulation N), 12 C.F.R. § 1014.3; and §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536. For example, the CFPB claims that the company advertised interest rates and other credit terms for mortgages when it was not actually offering those terms on mortgages. The consent order also stated that the company offered payment amounts for certain loans without disclosing that such offers were not for the entire duration of the loans, and that the company used advertisements that suggested it was affiliated with the government and VA when it was not.
Under the consent order, the company will pay a $50,000 civil monetary penalty. According to the CFPB, the action stems from a CFPB investigations of multiple mortgage companies that purportedly use deceptive mailers to advertise VA-guaranteed mortgages, which has resulted in a number of settlements over the past two months.