Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

'Risky' nonbank practices subject of new CFPB report
WASHINGTON (5/23/14)--A new report, issued Thursday by the Consumer Financial Protection Bureau, highlights what the bureau labeled as illegal actions that were uncovered by the bureau's new supervision of the payday, debt collection and consumer reporting markets.
"For the first time at the federal level, nonbank financial institutions are subject to supervisory oversight that holds them accountable for how they treat consumers," said CFPB Director Richard Cordray, unveiling the report.
"The CFPB's oversight of banks and nonbanks alike is exposing risky practices and getting results for consumers. We are pleased that our supervision program has been able to return more than $70 million to consumers in recent months," Cordray added. The CFPB gained supervisory authority over the nonbank entities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The new report generally covers supervisory activities between November 2013 and February 2014. In the three nonbank markets highlighted, examiners found that many companies had "systemic flaws" in their compliance management systems, such as consistently failing to have a system in place to track and resolve consumer complaints.
In the payday lending area, the CFPB report found:
  • Lenders deceiving consumers to collect debt;
  • Lenders illegally harassing borrowers and visiting consumers at work; and
  • Lenders hiring third-party collectors that illegally deceive and harass consumers.
In the debt collection market, the CFPB reported:
  • Debt collectors intentionally and illegally misleading consumers about litigation;
  • Debt collectors making excessive, illegal calls to consumers; and
  • Debt collectors failing to investigate consumer credit report disputes.
The bureau said it also discovered problems at consumer reporting agencies--including companies that are popularly called credit bureaus or credit reporting companies. The CFPB said its examiners found certain agencies did not handle consumer credit report dispute documents correctly and that some agencies were encouraging consumers to file disputes online or by telephone, but then refused to accept such disputes from some consumers.
Where CFPB examiners find problems, the bureau said in a release, they alert the company to their concerns and outline necessary remedial measures. When appropriate, the CFPB opens investigations for potential enforcement actions.
Use the resource link for more detail on the CFPB report findings.

News Now LiveWire
.@CUNA says new House bill is "further evidence" of lawmakers' interest in how @TheNCUA uses its funds from CUs. See News Now Monday.
2 hours ago
.@MECreditUnions announces winner of @YoungFreeME #SoundOff contest. @Sassquatch_Band will play Old Port Festival in June @PDD_Downtown
1 day ago
House Financial Services Com. to hold March 3 hearing to receive the semi-annual report of @CFPB Director Richard Cordray.
1 day ago
Rep. Jeff Miller (R-Fla.) re-introduced bill to ease veterans' access to loans for #smallbusiness purposes from a #creditunion (HR 1133)
1 day ago
You can get your subscription to @cuna 's free, daily, online #creditunion #news service News Now here:
1 day ago