May 20, 2022

Volume XII, Number 140

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CFPB Issues Spring 2022 Supervisory Highlights

On May 2, the CFPB released its Spring 2022 Supervisory Highlights. The findings of the report, which generally cover examinations completed between July and December 2021, are issued to help institutions and the general public better understand how we examine institutions for compliance with Federal consumer financial laws.  Highlights include the following findings:

  • Auto servicing companies were alleged to have engaged in unfair, deceptive, or abusive acts or practices like wrongful repossessions, misleading consumers about final loan payment amounts, and overcharging for add-on products.

  • Consumer reporting companies were deemed to be accepting information from companies that furnish consumer data, even though there were ample signs that these furnishers were unreliable.

  • Companies were found to be violating the Fair Debt Collections Practices Act and Consumer Financial Protection Act by, for example, using false or misleading representations in connection with the collection of debt.

  • Financial institutions were accused of Regulation E violations, including failure to:  (i) remove a duplicative hold on an account: (ii) honor a timely payment request; (iii) investigate errors; and (iv) provide notice to consumers regarding notice of revocation of provisional credit.

The report also highlighted that:

  • Remittance transfer providers engaged in deceptive acts or practices by making false and misleading representations of “instant” and “30 second” transfers, even though the transfers may not be completed in 30 seconds or they may be otherwise delayed, oftentimes up to 48 hours.

  • Student loan servicers misled consumers by failing to issue the incentive payments offered in advertisements of their contract and failed to issue timely refunds of payment in response to loan modifications.

Putting It Into Practice:  This report confirms the CFPB’s heightened scrutiny of participants in such markets as student lending, credit reporting, money transmission, and auto lending. As the CFPB conducts future examinations, the issues identified in the latest Supervisory Highlights are likely to be a consistent theme in future CFPB enforcement actions.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 133
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Associate

Gabriel is an Associate on the Telecom team and the Co-Lead Associate on the Blockchain and Digital Assets team in the firm’s Washington, D.C. office. He is a Blockchain Law Professional as Certified by the Blockchain Council.

At Sheppard Mullin, Gabriel assists the Telecom team in all aspects of communications law and regulation including, satellites, spectrum, 5G implementation, media companies, and new technologies. He assists the Blockchain and Digital Assets team in legal issues relating to the use of blockchain technology, social media, internet, video games, online gambling,...

202-747-2194
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