The CFPB has released the Winter 2020 edition of its Supervisory Highlights. The report discusses the Bureau’s examinations findings in the areas of debt collection, mortgage servicing, payday lending, and student loan servicing that were completed between April 2019 and August 2019.
Key findings include the following:
Debt collection. One or more debt collectors were found to have violated the FDCPA requirements to (1) disclose in communications subsequent to the initial written communication that the communication is from a debt collector, and (2) send a written validation notice within five days of the initial communication.
Mortgage servicing. One or more servicers were found to have violated the Regulation X loss mitigation notice requirements to (1) notify borrowers in writing that a loss mitigation application is either complete or incomplete within five days of receiving the application; (2) provide a written notice stating the servicer’s determination of available loss mitigation options within 30 days of receiving a complete loss mitigation application; and (3) provide a written notice containing specified information when the servicer offers the borrower a short-term loss mitigation option based on an evaluation of an incomplete loss mitigation application. With regard to the third violation, such violations took place when servicers automatically granted short-term payment forbearances based on phone conversations with borrowers in a disaster area who had experienced home damage or incurred a loss of income from the disaster. The Bureau considered these phone conversations to be loss mitigation applications under Regulation X. Because the violations were caused in part by the servicers’ efforts to handle a surge in applications due to natural disasters, CFPB examiners did not issue any matters requiring attention for the violations and servicers developed plans to enhance staffing capacity to respond to future disaster-related increases in loss mitigation applications.
Payday lending. CFPB examiners found:
Student loan servicing. CFPB examiners found that one or more servicers engaged in unfair practices in violation of the Dodd-Frank UDAAP prohibition in connection with monthly payment calculations. Servicers were found to have stated monthly payment amounts in periodic statements that exceeded those authorized by the consumers’ promissory notes, where either the servicers either automatically debited incorrect amounts or, for borrowers not enrolled in auto debit, the borrowers made an inflated payment or were charged a late fee for failing to make the inflated payment by the due date. These inaccurate calculations were the result of data mapping errors that occurred during the transfer of private loans between servicing systems. Servicers have conducted reviews to identify and remediate affected consumers and implemented new processes to mitigate data mapping errors.