CFPB Releases 13th Supervisory Highlights

On Monday, October 31, 2016, the CFPB released the 13th edition of its Supervisory Highlights. The report revealed, during the review period, recent confidential supervisory resolution resulted in restitution to over 225,000 consumers totaling approximately $11.3 million. Additionally, the CFPB stated its supervisory activities have either led to or supported two recent public enforcement actions that resulted in more than $28 million in consumer remediation and an additional $8 million in civil money penalties.

The examination portion of the report focused on automobile loan origination, automobile loan servicing, debt collection, mortgage origination, mortgage servicing, student loan servicing and fair lending.  In the fair lending section, the CFPB addressed limited English proficiency (LEP) consumers, Home Mortgage Disclosure Act final rule implementation, redlining, and an updated consent order.

The report highlighted strengths in auto finance origination compliance management systems (CMS), debt collection practices, and mortgage origination CMS. In terms of concerns, notable findings include:

  • Auto servicing violations included unfair practices relating to repossession fees.
  • Fair Debt Collection Practices Act (FDCPA) violations included charging consumers unlawful convenience fees, making several false representations to consumers, and unlawfully communicating with third parties in connection with the collection of a debt.
  • Fair Credit Reporting Act (FCRA) violations included failing to investigate indirect disputes, and having inadequate furnishing policies and procedures.
  • Mortgage origination violations included failure to conduct compliance audits of mortgage origination activities, weak oversight of service providers, and failure to implement procedures for establishing clear expectations to adequately mitigate the risk of harm arising from third-party relationships.
  • Student loan servicing violations related to income based repayment issues, payment allocation, communications related to paid-ahead status, and system errors.