The Justice Department announced that Citadel Federal Credit Union has agreed to pay more than $6.5 million to resolve allegations that it engaged in a pattern or practice of redlining majority-Black and Hispanic neighborhoods in and around Philadelphia, Pennsylvania from at least 2017 through 2021 in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).… Continue Reading
John L. Culhane, Jr.
Chopra says CFPB finalizing medical debt rule; agency issues advisory opinion on debt collector practices
Posted in CFPB Rulemaking, CFPB Supervision
The CFPB is in the process of completing its final rule intended to ban the inclusion of medical debts in credit reports, bureau Director Rohit Chopra said at a White House session intended to focus on practices in the medical debt collection industry.
“Often, predatory companies threaten to put medical debt on people’s credit reports, where lenders, landlords, and employers presume their accuracy,” Chopra said, in his prepared remarks.… Continue Reading
Judge refuses to dismiss most reverse discrimination counts in case against Colony Ridge
Saying that reverse redlining is a form of discrimination, the U.S. District Court for the Southern District of Texas has refused to dismiss a discrimination case alleging that Texas developer Colony Ridge specifically targeted Limited English Proficient (LEP) people.
In issuing the ruling, the court dismissed a mortgage processing company from the suit, saying that the firm had not been involved in any lending decisions.… Continue Reading
Court approves FTC agreement with Invitation Homes; company to pay $48 million, address “junk fee” practices, stop certain other practices
By John L. Culhane, Jr. on
Posted in FTC Enforcement
Invitation Homes, the nation’s largest landlord of single-family homes, has agreed to pay $48 million and to stop a significant number of its rental practices, including misleading renters about lease costs and charging undisclosed fees characterized by the FTC as junk fees, according to an agreement approved Sept. 27 by the U.S.… Continue Reading
CFPB: Number of servicemember complaints increased in 2023
By Brian Turetsky & John L. Culhane, Jr. on
Posted in CFPB, Military Issues
The Consumer Financial Protection Bureau’s (“CFPB”) Office of Servicemember Affairs Annual Report was released on September 24, 2024, highlighting areas of concern regarding student lending and noting that the number of complaints that servicemembers filed with the CFPB increased in 2023.
The report identifies trends in complaints, highlights financial services issues impacting servicemembers and veterans, and offers recommendations to improve financial protections for the military community.… Continue Reading
CFPB Reminds Financial Institutions to Retain Records of Affirmative Consent for Overdraft Opt-in
On September 17, 2024, the CFPB issued Consumer Financial Protection Circular 2024-05 on improper overdraft practices. The circular reminded financial institutions of their obligation to retain records that prove the consumer consented to the institution’s payment of ATM and one-time debit card transactions.
The Electronic Funds Transfer Act (EFTA) and Regulation E (12 CFR § 1005.17(b)(1)), prohibit financial institutions from charging an overdraft fee for paying ATM or one-time debit card transactions (“regulated overdrafts”) unless an institution: (i) provides the consumer with its overdraft service disclosure (a/k/a What You Need to Know About Overdraft and Overdraft Fees); (ii) provides the consumer a reasonable opportunity to opt in; (iii) obtains the consumer’s affirmative consent, or opt-in; and (iv) provides the consumer with a written confirmation of the consent, which includes a statement informing the consumer of the right to revoke such consent.… Continue Reading
CFPB’s Frotman: Companies are using technology to squeeze more out of those who can least afford it
Posted in CFPB
Innovation and technology are not the magic wands that will help low-income Americans climb out of debt; they often are tools used to prey on the neediest people, Seth Frotman, the CFPB’s general counsel told the Poverty Law Conference earlier this month.
“We hear a lot about ‘innovation’ and ‘financial technology’ in the consumer financial marketplace,” Frotman said, adding that it is not uncommon for such businesses to boast about how they serve an underprivileged population.… Continue Reading
CFPB: Most debt collection complaints in 2023 were attempts to collect debts not owed
By John L. Culhane, Jr. & Reid F. Herlihy on
Posted in CFPB Supervision, Debt Collection
The most frequent consumer debt collection complaints filed with the CFPB in 2023 were attempts to collect debts that actually were not owed, the bureau said in its annual Fair Debt Collection Practices Act report.
The CFPB said that those complaints amounted to 53% of the debt collection complaints filed with the bureau in 2023.… Continue Reading
Appeals Court: No FCRA Informational Injury Standing
Posted in Litigation and Court Decisions
A job applicant who claims he was not fully informed about adverse information that appeared on a background check is not entitled to relief under the Fair Credit Reporting Act (the FCRA), the Sixth Circuit Court of Appeals ruled on Aug. 20.
The court cited the Supreme Court’s decision in TransUnion LLC v.… Continue Reading
Transportation Department opens probe into rewards programs at four largest airlines
Posted in Credit Cards
Saying it wants to protect consumers from unfair, deceptive or anticompetitive practices, the Transportation Department on Sept. 5 launched an investigation into the rewards programs operated by the nation’s four largest airlines.
As part of that probe, Transportation Secretary Pete Buttigieg sent the four airlines letters ordering them to provide records and submit reports about the operation of their programs.… Continue Reading