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Volume XI, Number 267

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CFPB Issues Summer 2020 Supervisory Highlights

On June 29, the CFPB released its summer 2021 Supervisory Highlights.  The findings of the report, which cover examinations that generally were completed between January 1, 2020 to December 31, 2020, are issued to “help institutions and the general public better understand how the Bureau examines institutions for compliance with Federal consumer financial law.”

The CFPB noted four particularly concerning findings from the report:

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

  • Discouragement of people in minority neighborhoods from applying for credit by, among other things, locating offices in almost exclusively majority-white neighborhoods, only using pictures of white people in direct mail marketing campaigns, and publishing loan officer headshots of almost exclusively white people.

  • Mortgage servicers making the first notice or filing for foreclosure when it was prohibited, and representing to borrowers that they would not initiate a foreclosure action until a specified date, but nevertheless initiated foreclosures prior to that date.

  • Student loan servicers misleading consumers to believe they could not access the Public Service Loan Forgiveness (PSLF) program if they had older loans under the Federal Family Education Loan Program (FFELP), even though they could access PSLF by consolidating FFELP loans into Direct Loans.

Finally, the report includes findings that led to public enforcement actions resulting in more than $124 million in consumer remediation and civil money penalties.

Putting It Into Practice:  This report confirms the CFPB’s focus on fair lending and heightened scrutiny of participants in such markets as student lending, payday lending, auto lending, and mortgages.  If past is prologue, expect the current posture of the CFPB to resemble that of its Obama-era predecessors, leveraging its supervision and examination authority and exam findings to identify areas for potential enforcement.  Companies should consider best practices for putting themselves in the best position to succeed in the event of examinations.  Managing an examination can be an overwhelming undertaking, but advanced preparation and an organized response can go a long way to ensuring a successful outcome.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 188
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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
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