The Consumer Financial Protection Bureau announced recent supervisory actions returned more than $11 million to more than 225,000 harmed consumers.
In its most recent Supervisory Highlights report, the CFPB uncovered student loan servicer violations, such as failing to enroll qualified borrowers in affordable federal loan repayment plans, and it is issuing updated procedures for student loan servicing exams. The report also outlines violations found in auto loan origination and servicing, debt collection and mortgage origination, according to a CFPB news release.
“Our examiners continue to find sloppy or callous practices among some student loan servicers and other financial institutions that violate the law and put consumers at risk,” CFPB Director Richard Cordray said in the release. “If their practices hurt consumers, they need to rethink and change their practices in light of the actions and observations found in this report.”
The report focuses on the agency’s supervisory work generally completed between May and August 2016.
Specific issues uncovered by CFPB examiners include:
• Student loan servicers unfairly denying or failing to approve qualified students’ affordable payment plans. Eligible borrowers with federal student loans have a legal right to affordable payments based on their monthly income. CFPB examiners have found one or more servicers are regularly and illegally denying applications from qualified borrowers.
• Auto loan servicers illegally keeping borrowers’ belongings. CFPB examiners found one or more auto loan servicers refused to return personal belongings from a borrower’s repossessed car unless the borrower paid a storage fee. It is an illegal and unfair practice to refuse to return a consumer’s personal property until a fee is paid.
• Debt collectors charging illegal fees, misleading consumers. Examiners found one or more debt collectors charged illegal payment processing fees and made misleading collection calls about consumers’ credit scores or reports.
The report also provides information on compliance with CFPB rules and regulations, new exam policies, and best practices for communicating with non-English-speaking consumers, according to the release. The report includes revised exam procedures for student lending and servicing, as well as updates to CFPB guidance on compliance for service providers.
The report also outlines the CFPB’s new procedures for examining reverse mortgage servicing, and for assessing redlining risk in identifying discriminatory lending practices, the release stated.
The full report is available at http://files.consumerfinance.gov/f/documents/Supervisory_Highlights_Issue_13__Final_10.31.16.pdf.
Leave A Comment