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CFPB Enforcement Actions

The Consumer Financial Protection Bureau (CFPB), a federal agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, regulates the offering and provision of consumer financial products or services under the federal consumer financial laws, and has the authority to bring enforcement actions against financial service providers. While the CFPB accepts tips from whistleblowers, and applicable laws offer whistleblowers protection from retaliation, there is currently no provision for CFPB whistleblowers to receive financial rewards. However, conduct that is regulated by the CFPB may also give rise to a claim under a different whistleblower reward program.

Below are summaries of recent CFPB settlements or successful enforcement actions. If you believe you have information about fraud which could give rise to a claim under a whistleblower reward program, please contact us to speak with one of our experienced whistleblower attorneys.

March 15, 2017

The CFPB ordered Nationstar Mortgage LLC to pay a $1.75 million civil penalty for violating the Home Mortgage Disclosure Act (HMDA) by consistently failing to report accurate data about mortgage transactions for 2012 through 2014. This is the largest HMDA civil penalty imposed by the Bureau to date. In addition, Nationstar must take the necessary steps to improve its compliance management and prevent future violations. CFPB

February 7, 2017

The CFPB and New York Attorney General filed a lawsuit against RD Legal Funding, LLC, two related entities, and Roni Dersovitz, the companies’ founder and owner, for allegedly scamming 9/11 heroes and National Football League (NFL) concussion victims. The complaint alleges that the illegal scheme deceived 9/11 first responders with cancer and other illnesses and football players with brain injuries out of millions of dollars by luring them into costly advances on settlement payouts with lies about the terms of the deals. CFPB

February 2, 2017

The CFPB and Virginia Attorney General took action today against Woodbridge Coins and Jewelry Exchange, Inc. for deceiving consumers about the actual annual costs of its loans. The complaint is accompanied by a proposed consent order which, if approved, would require Woodbridge Gold & Pawn to pay $79,000 in consumer relief and penalties and end deceptive disclosures. CFPB

February 1, 2017

The CFPB took action against Mastercard and UniRush for breakdowns that left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities. In October 2015, a rash of preventable failures by Mastercard and UniRush prevented many customers from using their RushCard to get their paychecks and other direct deposits, take out cash, make purchases, pay bills, or get accurate balance information. UniRush then failed to provide customer service to many consumers who reached out for help during the service breakdown. Mastercard and UniRush will pay an estimated $10 million in restitution to tens of thousands of harmed customers and a fine of $3 million. CFPB

January 31, 2017

The CFPB took action against Prospect Mortgage, LLC, a major mortgage lender, for paying illegal kickbacks for mortgage business referrals, and two real estate brokers and a mortgage servicer that took illegal kickbacks from Prospect. Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties. CFPB

January 30, 2017

The CFPB took action against a group of law firms and attorneys that worked together to charge illegal fees to consumers seeking debt relief. The complaint alleges Howard Law, P.C., the Williamson Law Firm, LLC, and Williamson & Howard, LLP, attorneys Vincent Howard and Lawrence Williamson, and Morgan Drexen, Inc. ran this debt relief operation. CFPB

January 23, 2017

The CFPB took separate actions against CitiFinancial Servicing and CitiMortgage, Inc. for creating obstacles for struggling homeowners seeking options to save their homes. The mortgage servicers kept borrowers in the dark about options to avoid foreclosure or burdened them with excessive paperwork demands in applying for foreclosure relief. CitiMortgage has been ordered to pay an estimated $17 million in compensation and another $3 million in civil penalties. CitiFinancial Services is to refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million. CFPB

January 19, 2017

The CFPB sued TCF National Bank for tricking consumers into costly overdraft services. The CFBP alleges TCF designed its application process to obscure the fees and make overdraft seem mandatory for new customers to open an account, even though banks cannot charge overdraft fees on one-time debit purchases and ATM withdrawals without a consumer’s consent. TCF also adopted a loose definition of consent for existing customers in order to opt them into the service and pushed back on any customer who questioned the process. CFPB

January 18, 2017

The CFPB sued the nation’s largest servicer of both federal and private student loans, Navient, for systematically and illegally failing borrowers at every stage by providing bad information, processing payments incorrectly, and failing to act when borrowers complained. Navient also used short cuts and deception to illegally cheat many struggling borrowers out of their rights to lower repayments. CFPB

January 9, 2017

The CFPB issued orders against two medical debt collection law firms and their president for falsely representing that letters and calls were from attorneys attempting to collect on a debt when no attorney had yet reviewed the account. The law firms also failed ensure the accuracy of the consumer information they furnished to credit reporting companies and used improperly notarized affidavits in lawsuits filed against consumers. The practices affected thousands of individuals. The CFPB is ordering Works and Lentz, Inc., Works and Lentz of Tulsa, Inc., and their president, Harry A. Lentz, Jr., to provide $577,135 in relief to harmed consumers, correct their business practices, and pay a $78,800 penalty. CFPB
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