CFPB Ramps Up Enforcement Considerably
After a year of implementing some of the most significant regulations required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Consumer Financial Protection Bureau (CFPB) appears to be changing course towards heightened supervision, investigation and enforcement. Since September the CFPB has pushed an aggressive enforcement agenda, bringing an impressive six enforcement actions in just four weeks.
Enforcement actions have been accompanied by lawsuits, fines, penalties, corrective requirements and very public press calls to discuss the specifics of any given violation. Fines have ranged from $200,000 to $57 million and span the entire consumer financial services sector, from mortgage banking to payday lending, student lending, deposit banking and title services.
The CFPB has brought two actions against deposit-taking commercial banks. M&T Bank was charged $200,000 for deceptive advertising. The bank will also be required to refund account holders nearly $3 million. US Bank was also recently charged for advertising “add on” account services, but failing to deliver those services. US Bank will be required to refund $48 million to its customers, in addition to a $5 million civil money penalty, and $4 million fine to be paid to the Office of the Comptroller of the Currency (OCC).
Hydra Group, a payday lender, is being sued for a “cash and grab” scheme. The CFPB also brought a lawsuit against Corinthian Colleges for providing predatory student loans with excessive interest rates and a high likelihood of default.
The mortgage industry has also received considerable attention from the CFPB’s enforcement agenda. Lighthouse Title was fined $200,000 for an illegal kickback arrangement. Finally, Flagstar Bank was fined $10 million for violating the CFPB’s new mortgage servicing rules. The bank was also ordered to pay $27.5 million to refund victims.
Although the CFPB has been committed to thorough enforcement since its establishment, the recent volume in enforcement actions represents exceptionally aggressive supervision efforts.