CFPB Bites of the Month – September Top 10: Happy Fall Y’all | Hudson Cook, LLP

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In this month’s Top 10 article, we share some of our best “bites” from the previous month covered during the September 21, 2022 webinar.

So what happened last month?

Extra Bite: CFPB comments on cancellation of for-profit college-linked loan

On August 16, director Chopra made Remarks on consumers allegedly defrauded by a now-closed college. Principal Chopra said they were extremely pleased that the Department of Education and its federal student aid office had taken the legal steps to cancel the loans of those who were allegedly. He also said the CFPB plans to continue to review private lending pushed directly by schools – to ensure schools are not “arming” their students with illegal practices.

Bite #10: CFPB study looks at “Buy now, pay later” transactions

On September 15, the CFPB published a report regarding the Buy here, pay here sector. The report, “Buy Now, Pay Later: Market Trends and Consumer Impacts,” warned that consumers “may receive unequal information and protections.” Director Chopra said “Buy now, pay later is a rapidly growing type of loan that is closely replacing credit cards” and that CFBP “will work to ensure borrowers have similar protections, whether or not they use a credit card or loan Buy now, pay later. The CFPB also said it will use interpretative guidelines or rules to require BNPL vendors to comply with “most basic protections” that Congress has established for credit cards. In order to reduce the risk of “overextension”, the CFPB has indicated that it will continue to address “appropriate and accurate credit reporting practices”.

Bite #9: CFPB and Centers for Medicare and Medicaid Services Address Nursing Home Practices

On September 8, the CFPB and the Centers for Medicare and Medicaid Services released a Spotlight on the problem, circularand joint letter meet the requirements for admission to a retirement home and debt collection. The report notes that under the Nursing Home Reform Act, nursing homes cannot require a third-party caregiver to personally guarantee payment as a condition of admission for the resident. He also noted that any attempt to collect debts from caregivers may violate the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

Bite #8: The CFPB publishes a report on families living in rural areas

On September 1, the CFPB published its first report, in a planned series of reports on families living in rural areas. The report focused on 13 Appalachian states that the CFPB called “disproportionately rural.” The report also indicates that “Appalachia” earn less than consumers in other rural areas and have higher subprime mortgage rates. The CFPB said the report was intended to “start a conversation with stakeholders in the region” and that it would “monitor credit conditions” and use law enforcement and other tools to “ensure “that the market is fair, transparent and competitive for rural Appalachia.

Bite #7: CFPB annual report reveals end of refinancing boom

On September 19, the CFPB published its annual report report on residential mortgage activity and trends. The report shows a shift from refinancing loans in 2020 to home purchase loans in 2021, with a greater share of home purchase loans going to white Asian, black and Hispanic borrowers compared share of home purchase loans for non-Hispanic white borrowers. This year’s analysis also included additional key findings on a decrease in the number of mortgage institutions reporting the HMDA date in 2021 and revealed that the increase in mortgage origination was due to loans for the purchase of mortgages. housing, as refinance loans dwindled.

Bite #6: CFPB Says Suppliers Have Obligation to Investigate Consumer Disputes

On September 14, the CFPB and the FTC again addressed the obligation of providers to investigate credit disputes. The two agencies jointly filed an amicus Short in the United States Court of Appeals for the Third Circuit noting that when a consumer submits a dispute to a credit reporting company and the dispute is forwarded to the supplier, the supplier is required to investigate and report the results of its investigation to the credit reporting company. The memorandum states that a supplier cannot avoid this obligation by claiming that a dispute is “frivolous”. Suppliers are required to inform consumers of additional information needed, rather than simply ignoring potentially frivolous disputes.

Bite #5: It is unlikely that the CFPB will undertake the development of consumer arbitration rules in the near future.

On September 19, Director Chopra appeared at a public justice event and discussed arbitration. According to the media reports, Director Chopra indicated that the CFPB is considering options regarding arbitration, but the Congressional Review Act prevents the CFPB from using its previous rules to address CFPB concerns. In order to undertake new regulation, the CFPB would be required to conduct a new study on arbitration, and Chopra suggested that undertaking new regulation on consumer arbitration seems unlikely at this time.

Bite #4: Republican senators write to Director Chopra

In a September 12 letter to Director Chopra, 12 Republican senators claimed the CFPB abused its authority by using “name-and-shame tactics” to pressure companies to eliminate overdraft fees. Among various concerns, the senators indicated that the CFPB has changed its rules in order to be able to publish previously confidential information on financial institutions.

Bite #3: Consumer group and banking trade association call for more fintech regulation

On September 15, the Consumer Bankers Association and the Center for Responsible Lending jointly petitioned the CFPB asking for a “broader participation rule” so that the CFPB can “schedule reviews” of organizations offering installment loans and lines of credit. The CRL and CBA have called for the development of rules to cover fintech companies that issue and service personal loans. In their joint letter, the CRL and CBA noted that fintechs and non-bank lenders that provide personal loans are not subject to regular oversight by the CFPB, which has “created an uneven playing field and a significant risk to consumers.

Bite #2: CFPB sends $859,000 in payments to consumers for alleged harassment by debt collector

On September 14, the CFPB announcement that more than 8,000 people will receive checks totaling more than $859,000 after being falsely threatened with legal action by a national debt collector. Checks are sent by Rust Consulting, a class action and case settlement administrator. This distribution follows an April 2021 consent order against a debt collector and his former landlord for allegedly violating both the Consumer Financial Protection Act and the Fair Debt Collection Practices Act. The consent order permanently barred both the collector and its owner from the debt collection business, as well as ordered restitution and penalties.

Bite #1: CFPB issues payments for alleged victims of car loan payment company

On September 2, the CFPB also announcement payment details from consumers previously involved in certain car loan payment transactions. In August 2022, the CFPB began sending checks to eligible consumers who had previously enrolled in a program to expedite the repayment of their loans through an auto loan company. This distribution follows a November 2020 consent order against an auto loan payment company and its owner. The CFPB had alleged that the company had misrepresented the amount consumers would save using its payment platform, by not including registration fees in the calculations presented to consumers. According to the CFPB, because of the registration fees, the costs of the program usually exceeded any savings. The CFPB also found that the company’s advertising said it had helped hundreds of thousands of customers save millions of dollars in interest by participating in the program when they had no reason to make that claim. The CFPB ordered the company and its owner to pay $9,300,000 in damages to more than 100,000 consumers. Checks for these payments are also being sent by the Class Action and Case Settlement Administrator, Rust Consulting.

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