On 12/8/21, the Consumer Financial Protection Bureau (CFPB) issued their regular Supervisory Highlights report, which shines a light on legal violations identified by the CFPB’s examinations in the first half of 2021. The report also highlights prior CFPB supervisory findings that led to public enforcement actions in the first half of 2021.
According to CFPB Director Rohit Chopra, the report reveals that irresponsible or mismanaged firms harmed Americans during the COVID-19 pandemic. The following are the highlights of the report:
Mortgage servicers charged improper fees to borrowers enrolled in CARES Act forbearance
CFPB examiners found that mortgage servicers still charged borrowers late fees and default-related fees. These illegal fees exacerbated the economic hardships experienced by struggling homeowners in 2021. Examiners noted that mortgage servicers failed to refund some of the fees until almost a year later.
Examiners found fair lending violations
CFPB examiners found that mortgage lenders discriminated against African American and female borrowers in the granting of pricing exceptions, compared to non-Hispanic white and male borrowers, which is a violation of the Equal Credit Opportunity Act (ECOA). They also found that lenders improperly considered small business applicants’ religion in their credit decisions by improperly utilizing a questionnaire that contained explicit inquiries about an applicant’s religion.
Payday lenders improperly debited consumer bank accounts
The report also included lenders improperly debiting or attempting to debit consumers’ bank accounts. In some instances where consumers called to authorize a loan payment by debit card, lenders’ systems erroneously indicated the transactions did not process, resulting in the improper debiting of additional, identical amounts or unauthorized attempts. These practices significantly harmed consumers by depriving them of access to their funds and creating the risk of nonsufficient fund fees or overdraft fees levied by their banks.
Remittance providers failed to investigate notice of errors in timely fashion
According to the report, CFPB examiners found consumers were deprived of their rights by remittance providers who received notices of errors alleging that remitted funds had not been made available to designated recipients by disclosed dates of availability. Providers then failed to investigate whether deductions imposed by some foreign banks constituted a fee that the institutions were required to refund to the sender as part of the error resolution process.
The full CFPB statement can be found here.
Read the full Supervisory Highlights report here.