CFPB in 2015.

Author:Gilmer, Courtney H.

The Consumer Financial Protection Bureau has been a force to be reckoned with in 2015. An overview of its enforcement actions and rulemaking activity reveals the bureau is in expansion mode.

Despite rumblings early in the year from the new Congress about reining in the Consumer Financial Protection Bureau (CFPB), the bureau planned a packed agenda for 2015 and has thus far delivered on its to-do list. [paragraph] The early months of the year brought numerous enforcement actions against a variety of players in the financial services industry. From Oct. 1, 2014, through March 31, 2015, the CFPB obtained orders in enforcement actions requiring payment of more than $19 million in relief to consumers and more than $32 million in civil money penalties. [paragraph] The CFPB calculates that its supervisory actions during this period resulted in financial institutions providing more than $114 million in compensation to more than 700,000 consumers. [paragraph] It is clear that following an aggressive push in 2014, the attention of the CFPB continues to expand in scope to areas that include payday loans, auto loans, debt collection, student loans and overdraft protection.

2015 supervisory and enforcement actions

From large, traditional banking institutions to smaller mortgage originators, the CFPB's supervisory and enforcement agendas in 2015 have thus far had a broad scope with regard to both the types of entities and the categories of financial products targeted.

One particular area of focus has been on the regulation of advertisements by mortgage companies. In February, three mortgage companies faced enforcement actions resulting from alleged violations of Regulation N, the Mortgage Acts and Practices Advertising Rule. The bureau asserted that the companies had violated federal advertising rules contained in the regulations prohibiting misleading customers about whether certain loan products were affiliated with the federal government.

In early April, the CFPB announced the settlement of an enforcement action against a mortgage lender for alleged misleading advertising practices. Again, the CFPB deemed the advertisements misleading because they implied that the company was affiliated with the U.S. government.

Specifically, the mortgage company sent direct-mail advertisements to military service members and veterans containing the logos and names of the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA). The CFPB claimed that the advertisements incorrectly implied that they were either sent by or endorsed by the VA or FHA. Under the terms of the settlement, the lender paid a civil penalty of $250,000.

In late April, the CFPB reached a settlement with Birmingham, Alabama-based Regions Bank regarding claims that the bank unlawfully charged overdraft fees to customers who had not opted in for overdraft coverage.

The basis of the settlement was the Regulation E rule prohibiting depository institutions from charging overdraft fees in the absence of an affirmative opt-in to the charge by the consumer. Under the terms of the consent order, Regions will pay a $7.5 million civil money penalty in addition to refunding fees to customers. This enforcement action is evidence of the CFPB's ongoing focus on overdraft fees, and future enforcement on this issue should be expected.

Also in April, a CFPB enforcement action targeted an alleged debt-collection scam. Interestingly, that action named as defendants not only the debt collectors and their individual principals but also various companies alleged to have been "service providers" to the collectors, including payment...

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