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

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

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

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.
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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

On November 20, 2020, the CFPB filed a lawsuit against a student-loan debt-relief company, FDATR, Inc., and its owners, Dean Tucci and Kenneth Wayne Halverson. FDATR was an Illinois company that involuntarily dissolved in September 2020.  Through telemarketing and telephone sales, FDATR promised to provide student-loan debt-relief and credit-repair services to consumers.… Continue Reading

Coming on the heels of the Presidential election results, the CFPB circulated an internal e-mail suspending a reorganization that would have stripped the Office of Enforcement’s autonomy to open investigations and issue civil investigative demands.

Bloomberg Law reported the suspension after obtaining a copy of the internal e-mail. According to the Bloomberg article, Bryan Schneider, who leads the Bureau’s Division housing its supervision, enforcement, and fair-lending (SEFL) functions, reversed his earlier decision to reorganize the SEFL Division:

I continue to believe that SEFL should make changes to its organization, processes, and procedures to remain effective and efficient in protecting consumers in light of experience and new circumstances.… Continue Reading

It appears that the final chapter of the ITT Educational Services, Inc. (“ITT”) story was written last week with the CFPB’s announcement that it entered into a stipulated settlement with PEAKS Trust 2009-1 (“PEAKS”), a special purpose entity created in 2009 to purchase, own, and manage certain private student loans with students enrolled at ITT.… Continue Reading

On July 15, 2020, the CPFB filed a complaint in federal court against Townstone Financial, Inc. (Townstone) representing the first ever redlining complaint against a non-bank mortgage lender. The complaint is brought under the Equal Credit Opportunity Act (ECOA) and Consumer Financial Protection Act (CFPA), but not the Fair Housing Act (FHA).… Continue Reading

The CFPB has entered into a consent order with three companies to settle the Bureau’s claims that the companies violated the Dodd-Frank UDAAP prohibition and the FCRA in connection with contracts for deeds that they issued and serviced.  The settlement requires one of the companies to pay a $25,000 civil money penalty and the two other companies to jointly pay a $10,000 civil money penalty.… Continue Reading