CFPB Issues Enforcement Action

Enforcement Action – The CFPB announced that it is taking action against a mortgage company for failing to implement many protections, provided to borrowers with federally backed mortgage loans who were experiencing financial hardship, during the COVID-19 public health emergency. The CFPB found that the company misled certain homeowners who had sought a forbearance under the CARES Act into paying improper late fees, deceived consumers about forbearance and repayment options, and inaccurately reported the forbearance status of borrowers to credit reporting companies.

Fall Issue of CFPB Supervisory Highlights

Supervisory Highlights – The CFPB released the Fall issue of its Supervisory Highlights publication. Included in the report are key findings across consumer financial products and services, such as consumer reporting companies and data furnishers continued to violate the Fair Credit Reporting Act by failing to promptly address and update incorrect information on credit reports; mortgage servicers charged impermissible fees when homeowners went to make their mortgage payments; auto loan servicers engaged in unfair and deceptive acts or practices related to add-on product charges, loan modifications, double billing, electronic devices that interfere with driving, and debt collection tactics; financial institutions’ policies and procedures may have resulted in consumers losing their COVID-19 pandemic relief benefits due to garnishments or setoff practices.

CFPB Nonbank Supervision

Competition from Non-Bank Firms - The U.S. Department of the Treasury, in consultation with the White House Competition Council, has released a report entitled “Assessing Impacts of New Entrant Non-bank Firms on Competition in Consumer Finance Markets.” The report finds that, while concentration among federally insured banks is growing, new entrant non-bank firms, in particular “fintech” firms, are adding significantly to the number of firms and business models competing in core consumer finance markets and appear to be contributing to competitive pressure. While these fintech firms are enabling new capabilities, they are also creating new risks to consumer protection and market integrity, such as risks related to data privacy and regulatory arbitrage. To protect consumers in these rapidly changing markets and enable sustainable competition, among other recommendations, the report calls for enhanced oversight of the consumer financial activities of non-bank firms.

From the Federal Reserve

Fair Lending – On December 6, the Federal Reserve, along with 7 other agencies, will hold an interagency discussion of fair lending. During the discussion, redlining, appraisal bias, Special Purpose Credit Programs, and other supervision and/or enforcement-related updates from the agencies, will be covered.