Dodd-Frank News Center

CFPB settles with company over private loan program for students

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has reached a settlement with Student CU Connect CUSO, LLC (CUSO), a company set up to hold and manage private loans for students at ITT Technical Institute, which was run by ITT Educational Services, Inc. (ITT), until 2016 when ITT filed for bankruptcy and ceased operations. CUSO agreed to the settlement without admitting or denying the Bureau's allegations.

The Bureau's complaint alleges that CUSO was actively involved in the creation and implementation of the CUSO loan program, that ITT induced its students to take out the loans by a variety of means, and that CUSO knew or was reckless in not knowing that many student borrowers did not understand the terms and conditions of the loans and could not afford them.

The CFPB said that under the terms of the proposed stipulated judgment, CUSO must stop collecting on all outstanding CUSO loans, discharge all outstanding CUSO loans, and ask all consumer reporting agencies to which CUSO furnished information to delete tradelines relating to CUSO loans, among other provisions. Forty-four states plus the District of Columbia have also settled with CUSO on the same terms as the CFPB.

 

           

OIG issues 'Semiannual Report to Congress'

This story appeared in Bank Digest.                                 

The Office of Inspector General for the Federal Reserve Board and the Consumer Financial Protection Bureau has issued its "Semiannual Report to Congress," covering the period from Oct. 1, 2018, through March 31, 2019. According to an introductory message from Inspector General Mark Bialek, during this period the OIG issued eight reports related to the Fed's programs and four reports on the CFPB's operations. He also noted that the OIG's Office of Investigations pursued allegations of fraud against Fed and CFPB supervision programs and allegations of wrongdoing concerning the agencies' internal operations.

Bialek went on to say, "We processed 262 new hotline complaints and closed 13 investigations, and our work resulted in 10 persons referred for criminal prosecution and more than $1.3 billion in criminal fines, restitution, and special assessments."

CFPB blog post discusses making and sticking to a budget

This story appeared in Bank Digest.                                   

A Consumer Financial Protection Bureau blog post provides advice on how consumers can make a budget and stick to it, which the author said "is a key step towards getting a handle on your debt and working towards a savings goal, of any kind." To create a budget, the post advises consumers to: (1) get a complete picture of where their money comes from; (2) log their spending to get a realistic picture of where their money is going; (3) determine what bills they have to pay and when they are due; and (4) create a working budget using the CFPB's Budget Worksheet.

To stick to a budget, the author says consumers should: (1) create a way that's easy for them to track income and spending in real time; (2) analyze their spending habits and look for areas to cut back and ways to control impulse spending; (3) set a goal to have something they are working towards; and (4) develop a support system.

The post also includes a link for consumers to sign up for the Bureau's Get a Handle on Debt Boot Camp email course.

Mortgage lender to pay $1.75M over alleged incorrect HMDA reporting

This story appeared in Bank Digest.                         

The Consumer Financial Protection Bureau has reached a settlement with mortgage lender Freedom Mortgage Corporation, which the Bureau said has its principal place of business in Mount Laurel, N.J., and is one of the 10 largest Home Mortgage Disclosure Act reporters nationwide. Freedom consented to the issuance of a consent order without admitting or denying the Bureau's findings.

According to the consent order, the Bureau found that Freedom violated HMDA and Regulation C by submitting mortgage-loan data for 2014 to 2017 that contained errors. Specifically, the Bureau found that Freedom reported inaccurate race, ethnicity, and sex information and that much of Freedom's loan officers' recording of this incorrect information was intentional.

Under the terms of the consent order, Freedom must pay a civil money penalty of $1.75 million and take steps to improve its compliance management to prevent future violations.

CFPB requests renewal of information collection regarding institutions without deposit insurance

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is requesting to renew, without change, the Office of Management and Budget approval for an existing information collection entitled "Regulation I: Disclosure Requirements for Depository Institutions Lacking Federal Deposit Insurance (12 CFR 1009)."

According to the Bureau's notice, depository institutions lacking federal deposit insurance are required to disclose certain insurance-related information in periodic statements, account records, locations where deposits are normally received, and advertising. They are also required to obtain a written acknowledgment from depositors regarding the institution's lack of federal deposit insurance.

Written comments must be received by Aug. 6, 2019.

CFPB sues credit repair companies over alleged violations of Telemarketing Sales Rule

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau has filed a complaint against PGX Holdings Inc. and subsidiaries Progrexion Marketing Inc., Progrexion Teleservices Inc., eFolks LLC, and CreditRepair.com Inc. (collectively, Progrexion), and against John C. Heath, Attorney at Law PLLC, which does business as Lexington Law. The suit was filed in the United States District Court for the District of Utah.

According to the complaint, the defendants operate two of the largest credit repair companies in the country, Lexington Law and CreditRepair.com.

The Bureau alleges that the defendants violated the Telemarketing Sales Rule by requesting and receiving payment of prohibited upfront fees for their credit repair services. The Bureau also alleges that Progrexion and its subsidiaries violated the TSR and the Consumer Financial Protection Act by making deceptive representations in their marketing, or by substantially assisting others in doing so, according to the CFPB's release.

CFPB proposes to raise HMDA thresholds; requests feedback on reporting HMDA data

This story appeared in Bank Digest.                                   

The Consumer Financial Protection Bureau is proposing to raise the coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the Home Mortgage Disclosure Act rules. The proposed rule is intended to exempt smaller lenders from HMDA data reporting requirements and would clarify partial exemptions from certain HMDA requirements found in the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The Bureau has also issued an Advance Notice of Proposed Rulemaking seeking information on the costs and benefits of reporting certain data points under HMDA.

Comments on the proposed rule are due on or before 30 days after publication in the Federal Register, except that comments related to the Paperwork Reduction Act analysis must be received within 60 days of publication. Feedback on the ANPR must be received within 60 days of publication in the Federal Register.

OIG issues list of open recommendations made to CFPB

This story appeared in Bank Digest.                                   

The Office of Inspector General for the Consumer Financial Protection Bureau and the Federal Reserve Board has issued a document describing open recommendations the OIG has made to the Bureau. The document provides a list of publicly available report recommendations the OIG made to the Bureau that were open for more than 12 months as of March 31, 2019, and their status.

The list also includes the number and title of the report each recommendation appeared in, links to report summaries, and the issuance dates of the reports. As of March 31, 2019, 50 OIG recommendations to the Bureau remained open.

Senators object to CFPB's removal of HMDA data tools from website

This story appeared in Bank Digest.                                   

Several senators have written to Consumer Financial Protection Bureau Director Kathy Kraninger expressing their "deep concern" about the CFPB's decision "to remove Home Mortgage Disclosure Act (HMDA) Explorer and the Public Data Platform Application Programming Interface (API) that runs it from the CFPB website."

According to a press release by Sen. Chris Van Hollen (D-Md), who was one of the letter's signers, HMDA data is a primary tool to measure trends and disparities in mortgage credit access, and the CFPB's HMDA Explorer and API have made it easier for local organizations without sophisticated data analytics tools to assess the access those in their communities have to mortgage credit.

In their letter, the senators went on to say, "Removing HMDA Explorer without an adequate replacement would be a step backward in HMDA's more than 40-year trend of expanding access to valuable mortgage lending data and protecting equal housing access for all families in all markets. We strongly urge you to reverse course and request that you provide a detailed briefing no later than Friday, May 10, 2019, on the reason(s) that CFPB has decided to discontinue availability of HMDA Explorer and its API and what tools will be made available to provide equal or greater access to usable HMDA data for the public."

CFPB updates 'Prepaid Rule' small entity compliance guide

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has updated its "Prepaid Rule" small entity compliance guide. The Bureau added one new section and updated several others to incorporate technical specifications for submitting prepaid account agreements and agreement information to the Bureau. It also updated various sections to reflect miscellaneous administrative changes.