The Consumer Financial Protection Bureau (CFBP) announced yesterday (March 11) that its examiners have uncovered legal violations that will result in $19.4 million being given back to more than 92,000 consumers.
In its investigation, CFPB said it discovered a number of deceptive practices related to student loan debt collection, overdraft fees and violations related to mortgage origination, fair lending and consumer reporting agencies dispute errors — all of which CFPB says was unveiled under its bureau’s supervision.
“We are sharing our latest supervisory highlights report with the public so that industry can see trends, examine their own practices, and be proactive to make needed changes before consumers are hurt,” CFPB Director Richard Cordray said in a news release. “The CFPB will continue to monitor both bank and nonbank markets to ensure deception is rooted out, deficiencies are corrected, remediation is given to consumers, and violations are stopped in their tracks.”
Among the CFPB’s findings, which included unfair or deceptive overdraft practices, mortgage and fair lending violations, and mishandling by consumer reporting agencies, were:
- “Certain banks changed the way in which they assessed overdraft fees – and that the new approaches increased the likelihood that consumers would incur fees that they did not anticipate.”
- “Loan originators illegally received compensation based on the terms of the loan. ….Some loan originators advertised the length of payment, amount of payments, numbers of payments, and finance charges without providing the required disclosures.”
- “One or more institutions rejected mortgage applications from consumers because they relied on public assistance income, such as Social Security or retirement benefits, in order to repay the loan.”
- “One or more agencies are still failing to consistently forward all relevant consumer information to furnishers. Such inadequate processes can lead to errors in credit files and incorrect dispute investigation outcomes.”
As part of the Dodd-Frank Act, the CFPB was granted the authority to supervise banks and credit unions with over $10 billion in assets and certain nonbanks. This action led to the actions released yesterday, in which CFPB revealed the violations it uncovered during the supervision period, which was from July 2014-December 2014. In this specific case, CFPB has notified the institutions and given steps to remediate the issues.