08/23/17 – The Consumer Financial Protection Bureau (“CFPB”) recently released its eleventh Semi-Annual Report to Congress, which provides a summary of the CFPB’s activities and provides some insight into the CFPB’s direction.
While the report was mostly retrospective and reported on activities competed between fall 2016 and spring 2017, the CFPB did provide some indications about its ongoing activities as well as future plans.
According to the report, the CFPB’s supervisory actions resulted in financial institutions providing more than $6.2 million in redress to over 16,500 consumers. Through enforcement actions, the CFPB obtain approximately $200 million in total relief for consumers and over $43 million in civil money penalties.
From July 21, 2011 through March 31, 2017, the CFPB handled over 1.1 million consumer complaints about credit reporting, debt collection, money transfers, bank accounts and services, credit cards, mortgages, vehicle loans, payday loans, student loans, and certain other consumer financial services and pawn and title loans. As of March 31, 2017, the CFPB has also published nearly 750,00 complaints, including around 146,400 narratives. The CFPB indicated that consumer complaints identified a variety of issues, including transaction ordering and resulting overdraft fees on checking accounts, credit decisions for credit cards, payment processing issues with auto loans, and repeated request to submit documentation for a loss mitigation review on a mortgage.
Of all consumer complain submitted from spring 2016 to spring 2017, 30% of complaints dealt with debt collection. The CFPB calls debt collection “central” and as it “cuts across virtually all credit products.” According to a study conducted by the CFPB, about one in three consumers with a credit record were contacted by a creditor or collector trying to collect a debt in the year prior to the study.
In the upcoming period, the Bureau intends to continue expansion of the Bureau’s capacity to handle consumer complaints with respect to all products and services within its authority.
The CFPB indicated that it will continue to clarify rulemaking, including its undertaking for the Know Before You Owe mortgage disclosure rules and the Home Mortgage Disclosure Act (HMDA) regulations. The CFPB is also continuing to work on the proposed rule related to payday loans, vehicle title loans, and certain high-cost installment loans. The Bureau also continues to follow up on an earlier Request for Information seeking public comment on potential projects to streamline regulations.
In July 2016, the CFPB issued a proposal to amend Regulation P, regarding an exception to the requirement that financial institutions provide an annual notice to customers. Currently, the Bureau is reviewing the comments received on the proposal and is still developing the final rule.
The Bureau is continuing to work on a number of projects to address concerns in other consumer financial services markets. For example:
- Debt collection: The bureau is engaged in rulemaking regarding debt collection practices.
- Payday loans, auto title loans, and certain high-cost installment loans: The Bureau is developing a final rule regarding these products. In particular, the Bureau states that it is looking at the “failure [of loan providers] to determine whether consumers have the ability to repay without default or re-borrowing and certain payment collection practices.” The CFPB has received more than 1 million comments on the proposed rule and is reviewing those comments.
- Overdraft programs on checking accounts: The Bureau is engaged in policy analysis and further research initiatives in preparation for a rulemaking on overdraft programs on checking accounts.
- Mortgage rules: The CFPB intends to continue to work to address issues in connection with implementation of the Dodd-Frank Act’s mortgage requirements and implementation of the Bureau’s 2013 mortgage rules.
The Bureau did not shed any additional light into which activities the Bureau is currently focused on. Instead, the Bureau only stated that, “In using its investigation resources, the Bureau considers may factors, including the amount of consumer harm and the significance of the potential law violation. Investigations currently underway span the full breath of the Bureau’s enforcement jurisdiction.”
One remarkable investigation/enforcement action is an investigation of a bank into allegedly discriminatory practices. To conduct its investigation, the Bureau used testers to determine if the bank was treating minority loan applicants less favorably than non-Hispanic white loan applicants. This was the first time the CFPB used testing to support an allegation of discrimination. The CFPB indicated that it will continue to use testing in its enforcement investigative activities.
Additionally, in the upcoming period, the Bureau intends to look at enforcement of nondiscrimination on the basis of disability in programs receiving financial assistance from the CFPB.