CFPB Enforcement

February 8, 2024

The CFPB has ordered that Consumer First Legal Group, LLC, and attorneys Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford pay $12 million in consumer redress and penalties for charging millions in advance fees to homeowners seeking foreclosure relief.  The advance fees charged were allegedly for legal representation, but the company and the attorneys failed to provide any.  CFPB

November 28, 2023

Bank of America has been ordered to pay $12 million into the CFPB’s victims relief fund for violating the Home Mortgage Disclosure Act, which requires financial institutions to report demographic information about mortgage applicants. For at least four years, hundreds of BoA loan officers falsely reported that applicants failed to answer those questions, when in reality the officers had failed to ask them.  CFPB

November 20, 2023

Toyota Motor Credit Corporation, the U.S.-based auto-financing arm of Toyota Motor Corporation, has been ordered to pay $60 million—including $48 million in consumer redress and $12 million in penalties—for illegal lending and credit reporting misconduct in violation of the Consumer Financial Protection Act and Fair Credit Reporting Act. According to aggrieved consumers, dealers misled them about optional products and services that could be sold bundled with vehicles, either representing that they were mandatory or including them on contracts without their knowledge.  Toyota Motor Credit then stymied attempts to cancel bundled products and services, directing consumers to a dead-end cancellation hotline, delaying or withholding refunds, and providing inaccurate refund information.  CFPB

November 20, 2023

Student lender Prehired has been ordered to shut down permanently, pay more than $4.2 million in restitution, and void nearly $27 million in outstanding loans for allegedly trapping students with unlawful loans and employing abusive debt collection practices.  According to the CFPB and the attorneys general of 10 states, Prehired’s 12-week online training program made false promises about its ability to help students obtain six-figure paying jobs, while keeping them in the dark about key loan information.  CFPB; DE AG; NC AG

November 15, 2023

Online lender Enova International Inc. has been ordered to pay $15 million and is prohibited from offering certain consumer loans for seven years, after the CFPB found it guilty of violating a 2019 order to cease and desist from widespread illegal conduct, including withdrawing funds from consumer bank accounts without their consent, backtracking on loan extensions, failing to provide crucial information such as due dates, and failing to provide consumer copies of signed authorizations.  In addition to the new penalties, Enova has been ordered to provide redress to consumers harmed and tie executive compensation with the company’s compliance with consumer protection laws.  CFPB

October 17, 2023

Fintech company Chime Inc., d/b/a Sendwave, has been ordered to pay $1.5 million in fees and a $1.5 million penalty to the CFPB’s victim relief fund for violations of the CFPB’s Remittance Transfer Rule and the Electronic Fund Transfer Act.  According to the agency, Chime deceived consumers about the speed and cost of remittance transfers on its mobile app, forced consumers to waive their legal rights, failed to provide consumers with required disclosures or timely receipts, and failed to properly track, investigate, and resolve consumer disputes and errors.  CFPB

September 11, 2023

Tempoe, LLC has agreed to pay $35 million to 41 states, the District of Columbia, and the CFPB, after an investigation found the Ohio-based consumer finance company misled customers who sought financing at major retailers into believing they were signing up for an installment plan, when in fact they were being locked into expensive leasing agreements with unreasonable return policies.  Tempoe ultimately caused many customers to pay double or triple the original purchase price.  In addition to the monetary penalty, the company has been ordered to release customers from existing lease agreements and be banned from engaging in future leasing activities.  CFPB; DE AG; GA AG; VA AG

August 28, 2023

Some of the largest credit repair brands in the country, including CreditRepair.com and Lexington Law, have been banned from offering telemarketing credit repair services for 10 years to settle charges of using telemarketers to collect illegal advance fees for their services, in violation of the federal Telemarketing Sale Rule.  The companies have also been ordered to pay $2.7 billion in restitution, and two entities, Progrexion Marketing and Health law firm, will pay $64 million in civil penalties.  CFPB

July 11, 2023

Bank of America has been ordered to pay more than $100 million to harmed consumers, $90 million in penalties to the Consumer Financial Protection Bureau (CFPB), and $60 million in penalties to the Office of the Comptroller of the Currency (OCC) for multiple acts of misconduct.  The bank was found to charge consumers double fees on insufficient funds, withhold promised cash and point rewards on credit cards, and illegally obtain and use consumer credit reports without their approval.  CFPB

June 27, 2023

ACI Worldwide and its subsidiary, ACI Payments, will pay a $25 million civil penalty for improperly initiating around $2.3 billion in unlawful mortgage payment transactions, impacting nearly 500,000 homeowners with mortgages serviced by Mr. Cooper f/k/a Nationstar. ACI offers payment processing services across a wide range of industries. ACI conducted tests of its electronic payments platform on April 23, 2021. Rather than using deidentified, dummy data, ACI used client data files from Mr. Cooper instead, causing massive overdraft fees and other negative financial consequences to the unsuspecting borrowers. The CFPB found ACI in violation of the Consumer Financial Protection Act and the Electronic Fund Transfer Act, for illegally initiating withdrawals from borrower bank accounts, and improperly handling sensitive consumer data. ACI must pay the $25 million as well as adopt and enforce reasonable information security practices, and is prohibited from processing payments without obtaining proper authorization. CFPB