CFPB Enforcement

March 8, 2016

The CFPB’s supervisory examinations of banks and nonbanks in the last months of 2015  resulted in the remediation of $14.3 million to approximately 228,000 consumers.  Under the Dodd-Frank Act, the CFPB supervises banks and credit unions with more than $10 billion in assets and certain nonbanks, including, among others, mortgage companies, private student loan lenders, and payday lenders.  In their exams, the Bureau found violations in the student loan market, including illegal automatic defaults by student loan servicers and illegal garnishment threats by debt collectors performing services for the DOE. Examiners also found instances of international money transfer companies violating the CFPB’s new remittance rule, banks providing inaccurate information to credit reporting companies about customer checking accounts, and debt collectors illegally contacting consumers. CFPB

March 2, 2016

The CFPB ordered Dwolla, an online payment platform, to pay a $100,000 penalty for deceiving consumers about its data security practices and the safety of its online payment system.  The bureau also ordered Dwolla to fix its security practices.  The company, which collected and stored sensitive personal information for more than 650,000 users, failed to employ reasonable and appropriate measures to protect data from unauthorized access and failed to encrypt sensitive personal information, despite representations to the contrary.  CFPB

February 23, 2016

The CFPB filed two orders against Citibank relating to the bank’s illegal debt sales and debt collection practices.  The bureau ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and failing to forward consumer payments promptly to debt buyers.  Separately, the CFPB ordered Citibank to comply with a court order requiring the bank to refund $11 million to consumers and forgo collecting an additional $34 million for filing altered affidavits in debt collection litigations.   CFPB

February 2, 2016

Toyota Motor Credit will pay up to $21.9 million in restitution to thousands of African-American and Asian and Pacific Islander borrowers who paid higher interest rates than white borrowers for their auto loans, without regard to their creditworthiness, as a result of the company’s past practices. Toyota Motor Credit will also change its pricing and compensation system to substantially reduce dealer discretion and accompanying financial incentives to mark up interest rates. The action is a result of a joint CFPB and DOJ investigation that concluded that Toyota Motor Credit’s discretionary pricing and compensation policies resulted in discriminatory outcomes. CFPB

January 21, 2016

The CFPB required Herbies Auto Sales to pay $800,000 for violating the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by unlawfully advertising a misleadingly low APR without disclosing hidden charges and requirements. CFPB

December 28, 2015

The CFPB filed a proposed consent order in the Northern District of Georgia that would require Frederick J. Hanna & Associates and its principal partners to pay $3.1 million to the Bureau’s Civil Penalty Fund and bar them from illegal debt-collection practices. The CFPB’s complaint charges the firm with intimidating consumers with deceptive court filings and introducing faulty or unsubstantiated evidence in court. CFPB

December 17, 2015

The CFPB took separate actions against T3Leads and Eric V. Sancho, who operated Lead Publisher, for reselling sensitive personal data to lenders and debt collectors, allegedly exposing millions of consumers to harassment and deceit. CFPB

December 17, 2015

The CFPB ordered CarHop, one of the country’s biggest “buy-here, pay-here” auto dealers, and its affiliated financing company, Universal Acceptance Corporation, to cease their illegal activities and pay a $6,465,000 civil penalty for providing damaging, inaccurate consumer information to credit reporting companies. CFPB

December 16, 2015

The CFPB ordered EZCORP, Inc., a small-dollar lender, to refund $7.5 million to 93,000 consumers, pay $3 million in penalties, and stop collection of remaining payday and installment loan debts owed by roughly 130,000 consumers for illegal debt collection practices. The CFPB found that EZCORP collected debts from consumers through unlawful in-person collection visits at their homes or workplaces, risked exposing consumers’ debts to third parties, falsely threatened consumers with litigation for non-payment of debts, and unfairly made multiple electronic withdrawal attempts from consumer accounts, causing mounting bank fees. CFPB

December 7, 2015

The CFPB filed a proposed consent order that would require EOS CCA, a Massachusetts debt collection firm, to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty for (1) reporting and collecting on old cellphone debt that consumers disputed and EOS CCA did not verify and (2) providing inaccurate information to credit reporting companies about the debt and failing to correct reported information that it had determined was inaccurate. CFPB