WASHINGTON–The Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights report on legal violations identified during its supervisory examinations in the second half of 2021.
The report details key findings across consumer financial products and services, according to the Bureau.
Supervisory examinations review whether companies are complying with federal consumer financial law.
“When CFPB examiners uncover problems, they share their findings with companies to help them remediate the violations,” the CFPB said. “Typically, companies take actions to fix problems identified in examinations. For more serious violations or when companies fail to correct violations, the CFPB opens investigations for potential enforcement actions.”
The CFPB said the new report highlights findings from examinations of practices in the auto servicing, consumer reporting, credit cards, debt collection, deposits, mortgage origination, prepaid accounts, and remittances markets.
Among the Findings
Wrongful Auto Repo’s by Servicers
As described in a recent compliance bulletin, examinations have revealed that some servicers were engaging in unfair acts or practices by repossessing vehicles, even after consumers took intentional actions to prevent repossessions, the CFPB said.
“The timing of auto repossessions is commonly a surprise to consumers. They often lose personal property when the vehicle is repossessed or are unable to hold on to their job due to the lack of transportation,” the Bureau stated. “They also incur other significant costs, including the expense of finding alternative transportation, fees related to repossession, and negative marks on their credit reports.
“In certain examinations, examiners found that auto servicers engaged in unfairly failing to obtain refunds for borrowers for add-on products that no longer provided a benefit,” the Bureau continued. “In other instances, they found that auto servicers misled consumers about the amount of their final loan payments after their normal payments were deferred due to financial difficulties – largely as a result of the COVID-19 pandemic.”
Credit Reporting Firms Fail to Conduct ‘Reasonable Investigations’ Into disputed Debts
Under the Fair Credit Reporting Act, when a person disputes a debt on their credit report, the credit reporting companies must conduct a reasonable investigation into the accuracy of the information, the CFPB reminded.
“Examiners, however, have found that the credit reporting companies commonly fail to conduct these investigations in a timely manner, and they also fail to review and consider all the relevant evidence submitted by consumers,” the Bureau said.
The CFPB released a report in March that “highlighted how the credit reporting system is used to coerce families and individuals to pay medical bills that may not be accurate, are being disputed, or may not even be owed.”
Federal law requires credit reporting companies to ensure that medical bills reported on consumers’ credit reports are accurate. If furnishers of medical bills are contaminating the credit reporting system with inaccurate information, the CFPB said it expects credit reporting companies to limit their access to the system.
Read the Supervisory Highlights report.