The CFPB was given extensive rulemaking, enforcement and adjudicatory powers In their twenty-first summary of enforcement action and developments in the financial industry from the Federal regulatory side, the CFPB provides a general overview of enforcement actions being taken in the areas of debt collection, mortgage servicing, payday lending and student loan servicing. Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act . Looking back as Summer 2020 draws to a ... (CFPB) stepped-up its enforcement efforts over the summer. Putting The Financial Industry First. CFPB Penalties Decline as Enforcement Actions Go Small. However, the consent order was part of a global settlement of several class actions in which millions of dollars were paid by the company and others involved with the loans in question. The complaints also help the bureau determine where — and on which companies — to focus supervision and enforcement actions. On December 11, 2020, the Consumer Financial Protection Bureau (Bureau) and the Arkansas Attorney General filed a proposed stipulated final judgment and order in the United States District Court for the Eastern District of Arkansas against … In the second action, the CFPB settled with a company to resolve allegations of inaccurate HMDA data about mortgage transactions for 2016 and 2017. The CFPB under Kraninger has continued to bring claims alleging "unfair, deceptive, or abusive acts or practices," known as UDAAP. For the Consumer Financial Protection Bureau (CFPB), 2020 may be a landmark year. The CFPB declined to ratify some actions, including the voided Arbitration Rule and the rescinded provisions of the 2017 Payday Rule. The CFPB issued a UDAAP Policy on February 6, 2020. Consumer Financial Protection Bureau Rescinds Abusiveness Policy Statement to Better Protect Consumers MAR 11, 2021 When the watchdog launched in 2011, greedy Wall Street banks, financial scammers, and predatory lenders were finally held accountable. (The bureau’s new fiscal year starts on Oct. [i] Its stated purpose is to. CFPB Spokeswoman Marisol Garibay said the bureau is “vigorously using enforcement to protect American consumers” and is on pace this year to bring the second-highest number of actions … The Consumer Financial Protection Bureau (CFPB) has released its new semi-annual report to Congress. Overview. On November 22, 2019, the federal Consumer Financial Protection Bureau filed a complaint in the U.S. District Court for the Southern District of New York against Sterling Infosystems, Inc. regarding allegations that it violated the Fair Credit Reporting Act in providing criminal background checks to employers. The Consumer Financial Protection Bureau today issued a policy statement outlining how it intends to cite and challenge “abusive” conduct in supervision or enforcement actions. In her first year, Kraninger filed 25 settlements or lawsuits in 2019, twice as many as Mulvaney. After the confirmation and installation of incumbent Director Kathleen Kraninger, the CFPB has returned to a more active regulatory posture and appears to be following through on a statement the director made this past summer regarding an expected increase in enforcement actions through the remainder of 2020. During Cordray’s tenure—between 2012 and 2017—the CFPB initiated about 200 enforcement actions, resulting in billions of dollars in refunds and other financial redress. Under the guidance of Kathy Kraninger, the CFPB's Director, the Bureau has continued to be a leader in setting regulatory priorities across the financial industry. CFPB Policy Statement Provides Clarity on ‘Abusive’ Practices Under UDAAP. The complaint alleges that the company engaged in deceptive acts and practices under the Consumer Financial Protection Act (CFPA), 12 U.S.C. “The number of public enforcement cases Fair Lending Enforcement. As an example of this, note that the CFPB filed two… CFPB Publishes No-Action Letter Policy Statement By Obrea Poindexter, Sean Ruff, Amanda Mollo and Calvin Funk on February 23rd, 2016 Posted in CFPB, Regulatory Developments On February 22, 2016, the CFPB published its Final Policy Statement (“Final Policy”) on No-Action Letters (“NALs”). This increased enforcement is also expected to bring higher fines and penalties. The Bulletin capped off a string of CFPB enforcement actions implying that it was very difficult to operate an MSA legally. The mortgage industry should expect to see more enforcement actions from the CFPB, warned industry attorneys after hearing comments made by agency Director Kathy Kraninger, but penalties for wrongdoings could be lower. The CFPB and the FTC, along with state and federal partners, accomplished much toward stopping unlawful debt collection practices and continuing its vigorous law enforcement, consumer education and public outreach, and policy initiatives. On December 30, 2020, the CFPB announced a consent order with Omni Financial of Nevada, Inc. based on alleged violations of the Military Lending … The Ninth Circuit ultimately upheld the CFPB’s suit against Seila Law, and other courts had—until Friday—similarly upheld the CFPB’s pending enforcement actions. So, it is not the case that CFPB is avoiding enforcement. Lucy E. Morris. Almost one year ago, Kathy Kraninger was sworn in as the Consumer Financial Protection Bureau's second permanent Director. “I think it’s important to enforce the law so companies take it seriously,” Cordray said. The report also noted other pending enforcement actions, including those involving potential discrimination in several markets, including student lending, payday lending, credit cards, and mortgage lending. The CFPB brought nine enforcement actions in 2020 against lenders allegedly engaged in similar activity in violation of the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z (see our blog posts here, here, here, and here). The CFPB would focus on citing or challenging conduct as abusive only when the harm to consumers outweighs the benefit, and the agency would apply a cost-benefit analysis. The CFPB would focus on citing or challenging conduct as abusive only when the harm to consumers outweighs the benefit, and the agency would apply a cost-benefit analysis. Enforcement Work. CFPB regulations and enforcement actions under Kraninger, including new proposals on debt collection or payday lending, would likely be safer, she said. Whereas the bureau had only announced 9 new enforcement actions … The CFPB will be focused on creating new regulations, as well as increasing supervision, examination, and enforcement. After CFPB enforcement actions were halted under Mulvaney, they picked back up under Kraninger. A new report by Enforcement Watch shows that the CFPB took eight enforcement actions against financial services companies during the first two quarters of 2018, relative to the 26 enforcement actions during the … enforcement actions, and including individual liability for company leadership as an available remedy. ... as well as 9 enforcement actions in 2020 against companies that used deceptive mailers to advertise VA-guaranteed mortgages. CFPB Further Defines Abusiveness Standard; Expresses Intent to Limit Duplicative Enforcement. This post will discuss the Seila Law decision and its implications for both the CFPB and FHFA. CFPB began aggressively investigating potential RESPA Section 8 violations, resulting in a dozen enforcement actions in 2013 and 2014 alone. 2020 HMDA data on mortgage lending now available. October 16, 2020 Sen. Brown Statement on Director Kraninger’s Announced Reorganizations of the CFPB’s Division of Supervision, Enforcement, and Fair Lending. The CFPB replaced the Bulletin – RESPA Compliance and Marketing Services Agreements (MSAs) – with RESPA Frequently Asked Questions (FAQs) … To highlight other looming legal and regulatory risks, we will explore recent and pending lawsuits and CFPB enforcement actions (24 of which were publically announced in 2019 alone). The staff of the Federal Trade Commission has provided its 2020 Annual Financial Acts Enforcement Report to the Consumer Financial Protection Bureau on its enforcement and related activities regarding the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA).. CFPB Enforcement by the Numbers . Chopra’s CFPB is also expected to be more aggressive in launching investigations and initiating enforcement actions in the payday lending space as a stop-gap measure until a more comprehensive suite of legislative or regulatory actions can be taken. The CFPB Announced 80% Fewer Enforcement Actions In 2018, While Mulvaney Led The CFPB, Than It Did In 2015, When Richard Cordray Was Leading The Bureau. The two judgments ordered nearly $15.2 million in consumer redress and $80,000 in civil money penalties. Over the second quarter of 2020, Guidehouse observed an increase in Federal Regulatory activities, likely due to rebounding efforts as regulatory agencies begin to acclimate to enforcement during COVID-19. As a part of these efforts, the CFPB initiated 13 fair lending examinations, numerous prioritized assessments, and issued several fair lending Matters Requiring Attention to entities required to take corrective action. On July 7, 2020, the Consumer Financial Protection Bureau (CFPB) announced the ratification by Director Kathleen Kraninger of "most" of its prior regulatory actions. The 2020 Policy Statement established a three-part set of principles for enforcement based on the abusiveness standard: 1. The CFPB and the FTC share authority to enforce the FDCPA, and continue to work closely to coordinate efforts to protect consumers from unfair, deceptive, and abusive debt collection practices. By David Baumann | December 30, 2020 at 12:39 PM X The announcement rescinds a January 2020 policy statement on the abusiveness standard issued by former CFPB Director Kathy Kraninger. Home > CFPB > CFPB No-Action Letter Proposal. The 2020 principle had balanced whether harm to consumers outweighed benefits. 2021. The CFPB’s report also describes the two final rules concerning the FDCPA that the CFPB issued in October and December, 2020, which WBK covered here and here . CFPB's Recent Actions Signal Stance Toward RESPA Section 8 Is Changing Again. The Seila Law Decision CFPB Issues Winter 2020 Supervisory Highlights. Since it began monitoring financial institutions for MLA violations in September 2013, the CFPB has returned more than $130 million to service members, veterans and their families. The CFPB also noted that the parties signed agreements tolling all relevant statutes of limitations from February 23, 2017, until January 31, 2020. Quarterly Enforcement Actions Announced by CFPB. in Daily Dose, Featured, Government, Journal, News July 29, 2020 1,153 Views. While some CFPB enforcement actions arise out of examinations, the vast majority to date have been outgrowths of organic enforcement investigations that were not tied to examinations. Monday, February 8, 2021. The CFPB then issued a policy statement on April 1, 2020 to “highlight furnishers’ responsibilities under the CARES Act and inform consumer reporting agencies and furnishers of the Bureau’s flexible supervisory and enforcement approach during this pandemic regarding compliance with the Fair Credit Reporting Act (“FCRA”) and Regulation V.” Congress created the CFPB as an independent federal agency in Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") as an attempt to address the consumer financial protection issues that became salient in the wake of the 2008 financial crisis. In an important new development, the Consumer Financial Protection Bureau (CFPB) on Oct. 7, 2020, announced that it has rescinded Compliance Bulletin No. On July 7, 2020, the CFPB ratified most regulatory actions that it took from January 4, 2012 through June 30, 2020 in an attempt to proactively respond to the Seila Law decision. A divided Supreme Court has just ruled in Seila Law L.L.C. Yet the lack of much public enforcement activity over such a long stretch concerns agency critics who say discrimination in the financial services sector still exists and is a barrier to minorities' financial well-being. CARD Act enforcement action. Data on major enforcement actions taken by the Consumer Financial Protection Bureau shows how the third quarter of 2020 is the first time in awhile that the CFPB has been taking significant measures to combat fraud. In 2020, the CFPB engaged in four public enforcement actions, arising from alleged FDCPA violations. But 30 of those 32 enforcement actions had both an abusiveness and an unfairness or deception claim (i.e., only two enforcement actions contained just an abusiveness claim). We continue to work our way through appropriate enforcement actions,” Kraninger said during a recent Capitol Hill hearing. In 2020, the bureau reported on two major enforcement actions against financial institutions for fair lending violations. The number of public enforcement actions announced by the Consumer Financial … In another sign of the CFPB’s change of direction, it issued five fines of $1 and one fine of $7 in enforcement actions in fiscal year 2020, according to the third-quarter update. The CFPB typically passes a sizable portion of consumer complaints — 81% in 2019 — to the companies to which they pertain. Further, the 2020 CFPB enforcement actions reaffirm the CFPB’s mission to pursue accounts receivable entities for unfair practices. Regulation by enforcement refers to actions taken by the CFPB to initiate enforcement actions—or other legal proceedings—to prevent financial product or service providers “from committing or engaging in an unfair, deceptive, or abusive act or practice.”. Kraninger has talked about bringing clarity to how companies can exit early from CFPB consent orders and defining the term “abusive” act or practices in enforcement actions. CFPB Enforcement Sees Highest New Case Volume In 5 Years By Jon Hill Law360 (October 14, 2020, 8:24 PM EDT) --The Consumer Financial Protection Bureau has often been accused of going soft on businesses under President Donald Trump, but the agency is coming off its busiest quarter for enforcement since before he took office. In 2013 and 2015, the CFPB and DOJ brought enforcement actions against companies for giving mortgage brokers the discretion to charge higher mortgage fees regardless of the applicants’ creditworthiness or the terms of the loan. CFPB No-Action Letter Proposal By Jeremy Mandell on October 23rd, 2014 Posted in CFPB On October 10, 2014, the CFPB issued a proposal that would empower CFPB staff to issue no-action letters (NALs) for “innovative financial products or services that substantially benefit consumers where there is substantial uncertainty … CFPB Rescinds 2020 Policy Statement on ‘Abusive’ Practices Under UDAAP on March 11, 2021 Compliance and Risk , Newsbytes The Consumer Financial Protection Bureau today rescinded a January 2020 policy statement that clarified the bureau’s approach to citing and challenging “abusive” conduct in supervision or enforcement actions. The CFPB kicked off 2019 by settling five actions against a bank, a nonbank retailer and several US- and foreign-based lenders, partly or exclusively relying on its UDAAP authority. Established in 2011 in the wake of the financial crisis, the Consumer Financial Protection Bureau (CFPB In 2020, the CFPB engaged in four public enforcement actions arising from alleged FDCPA violations, according to a news release on the report . Yesterday, the CFPB rescinded a January 2020 policy statement that sought to provide greater clarity of the “abusive” prong of UDAAP. Bloomberg Law. Industry lawyers say the CFPB is still focused on fair-lending exams, and Kraninger told lawmakers in October that the agency was conducting investigations. The year-end flurry of enforcement … CFPB to Restructure Enforcement and Supervision Departments ... 2020, and lists a vacant ... SEFL division ensures compliance with federal consumer financial laws by supervising market participants and bringing enforcement actions when appropriate, according to the CFPB website. The report covered the period of Oct. 1, 2019 through Sept. 30, 2020 and was released after then-Director Kathy Kraninger resigned. The CFPB has become more lax in ... Total consumer redress and relief in 2019 was the third-highest in bureau history and the number of new enforcement actions in 2020 … CFPB enforcement actions increased `significantly’ in 2020. So far in 2020… ... Kraninger noted, the CFPB had 22 public enforcement actions and resolved a number of prior mitigation actions… CFPB Issues $100,000 Fine in First-Ever Data Security Enforcement Action. In the most recent action against an auto lender, on October 13, 2020, the CFPB alleged that Nissan Motor Acceptance Corporation (NMAC) engaged in unfair and deceptive acts and practices impacting its borrowers, in violation of the Consumer Financial Protection Act. To be sure, the CFPB’s track record of enforcement actions and penalties would indicate the president’s leanings already have a big influence on how aggressive it is in policing the industry. In 2020, the CFPB engaged in four public enforcement actions, arising from alleged FDCPA violations. CFPB Enforcement Actions Decreased 80% In 2018 From Peak Levels In 2015— And Have Remained Low Under Kathy Kraninger’s Leadership. That question appears to have been answered. 2. The report states that the Bureau announced two public fair lending enforcement actions in 2020. Third, the Court left one important question unanswered: it declined to address the effect of its ruling on prior CFPB rules and enforcement actions. 17 Two of the CFPB’s cases stand out in particular. There have been 19 enforcement actions taken during the third quarter of 2020 from the CFPB ­- the most taken since the third quarter of 2015. The CFPB brought four public enforcement actions related to purported violations of the FDCPA. This may translate into fewer enforcement actions, such as fines, levied against financial services firms. Under the direction of Richard Cordray in fiscal year 2014, the CFPB issued fines of more than $4 billion on 23 enforcement cases, per analysis by Compliance Week. On October 14, 2020, the Consumer Financial Protection Bureau (“ CFPB”) announced a series of organizational changes affecting the Supervision, Enforcement … In March 2021, the CFPB took another important step, rescinding a January 2020 policy statement that altered how the bureau applied the “abusiveness” standard in its supervisory and enforcement matters. This report contains recommendations. On May 6, 2021, the CFPB’s Office of Servicemember Affairs (OSA) published its 2020 annual report summarizing its activities and servicemember complaints from 2020. As noted previously, Seila Law raised questions about the validity of prior actions by the CFPB’s Director. Our report contains a recommendation designed to enhance the effectiveness of the Board's enforcement action monitoring practices. Monday, November 2, 2020. In their April 28, 2020 letter, the state AGs warned the CRAs that they expected compliance with the CARES Act and would “actively monitor for and enforce such compliance.”. Supervisory and Enforcement – Under the COVID-19 response policy (March 26, 2020), the CFPB informed financial institutions that it would take into account operational impacts due to … Coronavirus (COVID-19) is a respiratory illness that can spread from person to person with symptoms of fever, coughing, and shortness of breath. The CFPB's declaration that it rescinded the 2015 Bulletin because it "does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X" in the context of MSAs is part of a more general trend of RESPA Section 8 enforcement softening. Companies generally must respond within 15 days. 2. The CFPB maintained its April 1, 2020 guidance despite initial push back from state attorneys general and calls from consumer advocacy groups later in the year. ... Enforcement has implemented some effective practices, ... up activities according to its expectations and can clarify information on the Bureau's website on the status of public enforcement actions. The CFPB, in turn, filed formal ratifications in all of its other pending enforcement actions, indicating that then-Director Kathleen Kraninger had ratified the decision to bring the lawsuits. Richard Perr, PHI Co-Managing Partner and Chair of the Consumer Financial Services Practice Group, will be participating with a panel of experts in an AccountsRecovery.net Webinar on Analyzing The Increase in CFPB Enforcement Actions.. Live Webinar Tuesday, November 10, 2020 3:00 PM ET. The Consumer Financial Protection Bureau (CFPB) on April 1, 2020, issued a Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.The statement comes in response to the coronavirus (COVID-19) pandemic and the recently passed Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and serves two … As a part of these efforts, the CFPB initiated 13 fair lending examinations, numerous prioritized assessments, and issued several fair lending Matters Requiring Attention to entities required to take corrective action. The report also states that the CFPB referred four matters to the DOJ in 2020 involving alleged lending … 9 At the same time, the Bureau significantly reduced its fair lending enforcement activity, and continued to deploy its enforcement resources in other areas of focus, such as disclosures and debt collection. The 2020 Policy Statement established a three-part set of principles for enforcement based on the abusiveness standard: 1. They appear to be targeting different areas of financial services and without regard for the size of the entity. On July 7, 2020, the agency addressed this issue by ratification of substantially all final agency regulatory actions taken from January 4, 2012 , the date of confirmation of the first CFPB Director, to June 30, 2020, the date of the decision in Seila Law . The CFPB made clear that cracking down on deceptive and unfair acts and practices under the Consumer Financial Protection Act of 2010 (CFPA) remains a core focus, with 11 of the 15 complaints it filed last year alleging such violations. 1.) The CFPB’s report includes descriptions of the four public enforcement actions it initiated in 2020, two of which were resolved, and two of which remain in active litigation. As Schneider puts it, enforcements are an important part of the Bureau’s activities because education, rulemaking, and supervision alone won’t prevent a re-violation. Kraninger as CFPB Sheriff and the Potential Impact of the 2020 Presidential Election. The US Consumer Financial Protection Bureau continues to focus on fair lending and is poised to increase enforcement actions. There was a time after Cordray left the CFPB in November 2017 where people wondered if the Bureau would ever file another public enforcement action against a company in the financial services industry. CFPB continues enforcement trends with consent order for Military Lending Act and EFTA violations. Press Release, CFPB, “CFPB Announces Policy Regarding Prohibition on Abusive Acts or Practices,” January 24, 2020, available here. “Last year we had 22 public enforcement actions … I expect that number at the end of this fiscal year to be notably higher. ... (2020). The Seila Law decision has potential implications for ongoing CFPB enforcement actions and with forward-looking conduct provisions that the CFPB has included in past settlements. Second, the CFPB’s Director is now directly accountable to the President, significantly raising the stakes in the 2020 election for the agency’s regulatory and enforcement agenda. This past quarter saw a significant spike in CFPB enforcement actions. “provide greater certainty as to how the [CFPB] intends to use the abusiveness standard in supervision and enforcement…”. ... which has the potential to significantly curtail the FTC’s authority to seek monetary relief from violators via enforcement actions under section 13(b) ... Federal court dismisses CFPB enforcement action against student loan debt collectors. April 1, 2020 . There have been 19 enforcement actionstaken during the third quarter of 2020 from the CFPB ­- the most taken since the third quarter of 2015. Although the volume of CFPB enforcement actions has certainly slowed over the past year, the decline has happened at other federal agencies and even state agencies as well. The Consumer Financial Protection Bureau (“CFPB”) is slightly less than a decade old, created in the wake of the 2008 financial crisis to enforce the nation’s consumer financial protection laws and ensure that consumer debt products are safe and transparent for the consumers who use them. In terms of the CFPB’s agenda, we expect fair lending and racial equity to be at the top of the list, not only related to the access to credit but also in the servicing of existing credit. This note provides a brief update on CFPB actions to date. Home; News; ... Top CFPB official “hates” QM rules, jeopardizing safe harbor. Financial Services Enforcement Actions Tracker. The CFPB was party to that global settlement. The parties challenging the CFPB’s constitutionality are focused specifically on one provision of the The court rules that since CFPB Director Kraninger “ratified” the actions, the agency’s rules and enforcement actions are legal. The report covers the FTC’s enforcement activities regarding the Truth in Lending Act (TILA), the Consumer Leasing Act (CLA), and the Electronic Fund Transfer Act (EFTA). The U.S. Consumer Financial Protection Bureau announced 11 enforcement actions in December 2020. On Wednesday, October 14, 2020, the Consumer Financial Protection Bureau (CFPB) announced a major reorganization of its Division of Supervision, Enforcement, and Fair Lending (SEFL). Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger indicated to lawmakers at a Senate Banking Committee hearing last week that enforcement actions in 2020 are expected to increase from their current levels by the end of the fiscal year, according to testimony provided by the director herself. “Last year we had 22 public enforcement actions … I expect that number at the end of this fiscal year to be notably higher. Schemes to deceive, scam, and discriminate against consumers were rooted out. • Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J (April 27, 2020), which provided that the CFPB would not take supervisory or enforcement action against land developers subject to the Interstate Land Sales Full Disclosure Act and Regulation J for delays in filing …