In July 2023, the CFPB released the Summer 2023 Edition of its Supervisory Highlights that notes recent supervisory findings of abusive acts or practices supervised institutions engaged in across multiple product lines. The findings included in the report cover examinations in the areas of auto origination, auto servicing, consumer reporting, debt collection, deposits, fair lending, information technology, mortgage origination, mortgage servicing, payday and small dollar lending, and remittances that were completed from July 1, 2022, to March 31, 2023.
Highlights of the report include the following findings by the examiners of the CFPB:
Several institutions engaged in the deceptive marketing of auto loans by using advertisements that pictured cars that were significantly larger, more expensive, and newer than the advertised loan offers were good for;
Three unfair or abusive acts or practices at auto servicers related to charging interest on inflated loan balances, cancelling automatic payments without sufficient notice, and collection practices after repossession;
Deficiencies in a) “consumer reporting companies” (CRCs) compliance with FCRA permissible purpose-related policy and procedure requirements and b) furnisher compliance with FCRA and Regulation V dispute investigation requirements;
Debt collectors continued collection attempts for work-related medical debt after receiving sufficient information to render the debt uncollectible under state worker’s compensation law absent written evidence to the contrary, which the collector did not obtain from its client;
Unfair acts or practices due to institutions’ assessment of both nonsufficient funds (NSF) and line of credit transfer fees on the same transaction;
ECOA and Regulation B violations including pricing discrimination and discriminatory lending restrictions;
Institutions engaged in unfair acts or practices by failing to implement adequate information technology security controls such as weak password management policies, failure to establish adequate controls in connection with log-in attempts, and inadequately implementing multi-factor authentication or a reasonable equivalent for consumer accounts;
Some institutions used a compensation plan that allowed a loan originator who originated both brokered-out and in-house loans to receive a different level of compensation for the brokered out loans versus in-house loans, which is a violation of Regulation Z;
UDAAP and regulatory violations at mortgage servicers, including violations during the loss mitigation and servicing transfer processes, as well as payment posting violations;
During examinations of payday and small-dollar lenders, Supervision identified unfair, deceptive, and abusive acts or practices and violations of Regulation Z, including unreasonable limitations on collection communications, false collection threats, unauthorized wage deductions, among others; and
Lastly, some institutions did not develop written policies and procedures designed to ensure compliance to the Remittance Rule of Regulation E.
The CFPB’s Summer 2023 Supervisory Highlights can be found here.