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Penalties Galore
The CFPB issued three large penalties against financial institutions and lenders last week. In the first, the CFPB ordered Hyndai Capital to pay $19 million for widespread credit reporting failures. The CFPB claims that Hyndai did not take steps to promptly update incorrect information it furnished to credit bureaus, did not have reasonable identity theft procedures, and, among others, failed to have reasonable accuracy and integrity policies and procedures.
In the next Order, the CFPB along with the DOJ, ordered Trident Mortgage Company to pay more than $22 million for discrimination and red lining. Investigations reportedly revealed that Trident distributed emails containing racial slurs and racist comments, avoiding sending loan officers to minority neighborhoods, and developed marketing campaigns and advertisements that discouraged and ignored minorities.
The last order, for $37.5 million was against U.S. Bank for illegally exploiting personal data to open sham accounts without customer authorization. The CFPB's investigation found that the bank "was aware that sales pressure was leading employees to open accounts without authorization, and the bank had inadequate procedures to prevent and detect these accounts. Specifically, U.S. Bank imposed sales goals on bank employees as part of their job requirements. U.S. Bank also implemented sales campaigns and an incentive-compensation program that financially rewarded employees for selling bank products.
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