On December 8th, the Consumer Financial Protection Bureau (CFPB) issued the 25th edition of its Supervisory Highlights report, which covers examinations completed in the first half of 2021. The CFPB reported on violations that occurred in the areas of credit card account management, debt collection, deposits, fair lending, mortgage servicing, payday lending, prepaid accounts, and remittance transfers.
The report signals that the CFPB will continue to enhance enforcement actions against mortgage servicers. Since March 2020, the CFPB has prioritized mortgage servicing supervision due to the increase in borrowers applying for and receiving mortgage forbearance under the CARES Act as a result of the COVID-19 pandemic. CFPB examiners found that mortgage servicers unlawfully charged borrowers late fees and default-related fees. Examiners found that mortgage servicers failed to refund some of the fees until almost a year later. The CFPB vowed to continue its work to ensure that all mortgage servicers meet their homeowner protection objections under applicable consumer protection laws.
Examiners also identified several violations of the Equal Credit Opportunity Act by mortgage lenders, such as discrimination against African American and female borrowers in the granting of pricing exceptions, compared with non-Hispanic white and male borrowers. Specifically, examiners found a lack of lenders’ oversight and control over how mortgage loan officers granted pricing exceptions to customers. The CFPB emphasized its commitment to “rooting out all forms of lending discrimination, including redlining.”
The report also highlights the examiners’ findings that payday lenders improperly debited or attempted to debit consumers’ bank accounts, depriving consumers of access to their funds and creating the risk of nonsufficient fund fees or overdraft fees. The CFPB advised that it will continue to exercise and enforce its authority in the payday lending market to protect vulnerable consumers and their economic dignity.
The CFPB found that certain remittance providers failed to investigate notice of errors in a timely fashion. Specifically, consumers were deprived of their rights by remittance providers who received notices of errors alleging that remitted funds had not been made available to designated recipients by the disclosed dates of availability. Providers then failed to investigate whether deductions imposed by some foreign banks constituted a fee that the institutions were required to refund to the sender as part of the error resolution process.
In March, CFPB Director Rohit Chopra told senators that under his direction, the CFPB would have a more aggressive enforcement unit focusing on racial equity and fair lending. He also promised tougher oversight of credit bureaus, mortgage servicers, and student loan servicers for compliance with pandemic relief measures. The CFPB’s recent report shows that he is keeping his promise. More recently, Chopra warned that he “will continue to supervise firms to halt harmful practices before they become widespread.” We can expect that the CFPB will continue its aggressive approach into 2022.
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