As previously reported, in July 2020 the CFPB filed the first ever redlining complaint against a nonbank mortgage company, Townstone Mortgage (Townstone), under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA). The US District Court for the Northern District of Illinois recently granted Townstone’s motion to dismiss the CFPB’s complaint on the grounds that the ECOA applies to applicants and not to prospective applicants. … Continue Reading
CFPB Enforcement
Ninth Circuit finds marketer of scholarship assistance subject to CFPB enforcement authority
By Elliot Johnson on
On December 13, 2022, the Ninth Circuit affirmed the grant of summary judgment by a California federal district court to the Consumer Finance Protection Bureau (“CFPB”) in a civil enforcement action alleging that Armond Aria, the owner of Global Financial Support, Inc., mailed deceptive solicitations to current and prospective college students advertising a targeted program for assisting those students in applying for scholarships. … Continue Reading
New litigation challenges CFPB’s subpoena authority based on Fifth Circuit decision holding CFPB’s funding mechanism is unconstitutional
By Tanner Horton-Jones on
As the industry continues to digest the Fifth Circuit’s opinion in Community Financial Services Association of America, Ltd. v. Consumer Financial Protection Bureau, which held the Bureau’s funding mechanism to be unconstitutional, new litigation illustrates the challenges that the decision creates to the CFPB’s ability to conduct oversight and enforcement.… Continue Reading
GOP lawmakers question CFPB’s relationship with state attorneys general and take aim at interpretive rule on state enforcement authority
By John C. Grugan on
Posted in CFPB Enforcement, State Enforcement
Three Republican House members sent a letter last week to CFPB Director Chopra raising questions about the Bureau’s relationship with state attorneys general and its interpretive rule issued in May 2022 regarding the authority of state attorneys general and state regulators (State Officials) to enforce the Consumer Financial Protection Act (CFPA).… Continue Reading
Director Chopra promotes aggressive enforcement in remarks to National Association of State Attorneys General
By Ballard CFS Group on
In remarks given on Tuesday to the National Association of State Attorneys General (NAAG), CFPB Director Chopra promoted an aggressive approach to enforcement by both the CFPB and state attorneys general (AGs).
In his most noteworthy remarks, Director Chopra:
- Identified federal preemption as having played a major role in the 2007-2009 sub-prime mortgage crisis and suggested that the OCC had used preemption “to attack state consumer protection enforcement.”
This week’s podcast: CFPB enforcement action developments and trends
By Barbara S. Mishkin on
Posted in CFPB Enforcement
CFPB enforcement activity has already ramped up and the pace is expected to increase with Director Chopra now at the helm. We look at the areas expected to be the focus of intensified enforcement activity, such as military lending, fair lending, and treatment of LEP consumers, and new areas under consideration by CFPB enforcement staff, such as machine learning models, use of alternative data, and fair lending related to servicing and loss mitigation (particularly in light of the end of pandemic-related forbearances). … Continue Reading
CFPB Enters Into Consent Order With Reverse Mortgage Lender and Broker
By Richard J. Andreano, Jr. on
The CFPB recently entered into a consent order with Nationwide Equities Corporation (Nationwide), which the CFPB refers to as a mortgage broker and mortgage lender that primarily provides jumbo reverse mortgage loans and Home Equity Conversion Mortgage Loans (HECMs). The CFPB asserts in the consent order that Nationwide engaged in direct mail advertising practices that violated the Mortgage Acts and Practices—Advertising Rule (the “MAP Rule,” also known as Regulation N), the closed-end advertising requirements of Regulation Z under the Truth in Lending Act (TILA), and the prohibition against unfair, deceptive or abusive acts or practices under the Consumer Financial Protection Act of 2010 (the “CFPA”).… Continue Reading
CFPB Files Complaint Against a Former Mortgage Lender
By Richard J. Andreano, Jr. on
The CFPB recently filed a complaint in the United States District Court for the District of Connecticut alleging violations of various federal consumer protection laws by 1st Alliance Lending, LLC (1st Alliance), a former mortgage lender. The complaint also names several principals of 1st Alliance as defendants. According to the complaint, certain alleged conduct occurred from 2015 until at least August 2019, with other alleged conduct occurring in a narrower period within such timeframe.… Continue Reading
CFPB issues mortgage servicing consent order
By Reid F. Herlihy on
On December 18, 2020, the CFPB announced a consent order with Seterus, Inc. (Seterus), and its successor-in-interest, Kyanite Services, Inc. (Kyanite), based on findings of mortgage servicing violations.
The consent order alleges the following violations by Seterus while it was in operation:
- Unfair acts or practices for failing to accurately review, process, track, and communicate to borrowers information regarding their loss mitigation applications;
- Deceptive acts or practices by sending loss mitigation application acknowledgement notices that (1) misrepresented the status of borrower application documents as received or missing, and (2) provided inaccurate due dates for submission of borrower application documents;
- Violations of the loss mitigation rules in Regulation X (12 C.F.R.
CFPB Issues Remittance Transfer Consent Order
By Taylor R. Gess on
On December 21, 2020, the CFPB issued its third consent order involving violations of Subpart B of Regulation E, 12 C.F.R. §§ 1005.30 to 1005.36, the Remittance Transfer Rule (“Remittance Rule”) in the last four months and fourth order since August 2019. This most recent consent order was issued against Envios de Valores La Nacional Corp.… Continue Reading