CFPB Enforcement Actions

July 2018CFPB

July 20, 2018 – The CFPB announced a proposed settlement with TCF National Bank regarding the bank’s marketing and sale of overdraft services. TCF allegedly obscured the overdraft fees it charged and made consenting to overdraft fees seem mandatory for new customers to open an account. TCF has agreed to pay $25 million in restitution to customers who were charged overdraft fees and has agreed to an injunction to prevent future violations. CFPB

June 2018

June 13, 2018 – South Carolina-based Security Group Inc. and two of its subsidiaries will pay a $5 million civil penalty to resolve charges they engaged in improper debt collection practices, including calling consumers at work and physically blocking them from leaving their homes. The settlement also resolves allegations the Security Group entities provided inaccurate and incomplete consumer data to credit reporting agencies. CFPB

April 2018

April 20 – The CFPB assessed a $1 billion penalty against Wells Fargo Bank, N.A. for violating the CFPA in how it administered a mandatory insurance program related to its auto loans and how it charged certain borrowers for mortgage interest rate-lock extensions. CFPB

November 2017

November 21 – The CFPB ordered Citibank, N.A. to pay $3.75 million in redress to consumers and a $2.75 million civil money penalty for misleading borrowers into believing that they were not eligible for a valuable tax deduction on interest paid on certain student loans, incorrectly charging late fees and added interest to the student loan balances of borrowers who were still in school and eligible to defer their loan payments, and misleading consumers about how much they had to pay in their monthly bills and failing to disclose required information after denying borrowers’ requests to release loan cosigners. CFPB

November 20 – The CFPB fined Xerox Business Services, LLC, now called Conduent Business Services, a $1.1 million civil penalty for software errors that led to the sending of incorrect consumer information about more than one million borrowers to credit reporting agencies. The company also failed to notify all of its auto lender clients about known flaws in its software that led to the errors. CFPB

November 15 – The CFPB sued Think Finance for its role in deceiving consumers into repaying loans that were not legally owed. The Bureau seeks to recoup relief for harmed consumers and impose a penalty. CFPB

November 8 – The CFPB sued Freedom Debt Relief, the nation’s largest debt-settlement services provider, and its co-CEO Andrew Housser for charging consumers without settling their debts as promised, making customers negotiate their own settlements, misleading customers about fees and the reach of its services, and failing to inform customers of their rights to funds they deposited with the company.  The Bureau is seeking seeking compensation for harmed consumers, civil penalties, and an injunction against Freedom and Housser to halt their unlawful conduct. CFPB

October 2017

October 12 – The CFPB sued Federal Debt Assistance Association, LLC, Financial Document Assistance Administration, Inc. (both operating under the name “FDAA”), Clear Solutions, Inc., and their owners, Vincent Piccione, David Piccione, and Robert Pantoulis, for falsely presenting the two FDAA companies as being affiliated with the federal government. The Bureau also alleges that FDAA’s so-called “debt validation” programs violated the law by falsely promising to eliminate consumers’ debts and improve their credit scores in exchange for thousands of dollars in advance fees. The lawsuit seeks to end these deceptive practices, obtain redress for harmed consumers, and impose civil money penalties. CFPB

September 2017

September 27 – The CFPB ordered real estate settlement services provider Meridian Title Corporation to pay up to $1.25 million in redress to consumers for steering them to a title insurer owned in part by several of its executives without making disclosures about the businesses’ affiliation. CFPB

September 19 – The CFPB filed a complaint and proposed consent order against Top Notch Funding, its owner Rory Donadio, and his business associate John “Gene” Cavalli, for lying in loan offerings to consumers who were awaiting payment from settlements in legal cases or from victim-compensation funds. The Bureau seeks $70,000 in civil money penalties and an order preventing Top Notch, Donadio, and Cavalli from offering or providing such products in the future. CFPB

September 18 – The CFPB took action against the National Collegiate Student Loan Trusts and their debt collector, Transworld Systems, Inc., for illegal student loan debt collection lawsuits. The Bureau ordered National Collegiate Student Loan Trusts to pay at least $19.1 million. It also ordered Transworld Systems, Inc. to pay a $2.5 million civil money penalty. CFPB

September 6 – The CFPB ordered Zero Parallel, LLC, an online lead aggregator, pay a $100,000 penalty for steering consumers toward lenders who offered illegal or unlicensed loans that were void in the consumer’s state. The CFPB also ordered Zero Parallel’s owner, Davit Gasparyan, to pay a $250,000 penalty for similar illegal conduct at his prior company, T3Leads, in a separate case. CFPB

August 2017

August 30 – The CFPB filed a proposed final judgment in a federal lawsuit against Prime Marketing Holdings, LLC for illegal credit repair practices.  The proposed order would permanently ban the company from doing business within the credit repair industry and require a $150,000 civil money penalty. CFPB

August 23 – The CFPB ordered American Express to pay at least $1 million for the actions of two of its banking subsidiaries that discriminating against consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. CFPB

August 17 – The CFPB filed a complaint and proposed settlement against Aequitas Capital Management, Inc. and related entities, for aiding the Corinthian Colleges’ predatory lending scheme by enabling Corinthian to make high-cost private loans to students that both Aequitas and Corinthian knew students could not afford. Under the CFPB’s proposed settlement, about 41,000 Corinthian students could be eligible for approximately $183.3 million in loan forgiveness and reduction. CFPB

August 2 – The CFPB ordered JPMorgan Chase Bank, N.A. to pay a $4.6 million penalty and implement necessary policy changes to address its failure to have proper, legally-required processes for reporting accurate consumer checking account behavior to consumer reporting companies. CFPB

July 2017

July 27 – The CFPB filed two complaints and proposed final judgments in federal court against four California-based credit repair companies and three individuals, Prime Credit, LLC, IMC Capital, LLC, Commercial Credit Consultants, Park View Law, known formerly as Prime Law Experts, Inc., Blake Johnson, Eric Schlegel, and Arthur Barens, for misleading consumers and charging illegal fees. The complaints allege that the companies not only charged illegal advance fees for credit repair services, but also misrepresented their ability to repair consumers’ credit scores. CFPB

June 2017

June 7 – The CFPB took action against mortgage servicer Fay Servicing for failing to provide mortgage borrowers with legally required protections against foreclosure. Fay violated the CFPB’s servicing rules by keeping borrowers in the dark about critical information about the process of applying for foreclosure relief. The CFPB also found instances where the servicer illegally launched or moved forward with the foreclosure process while borrowers were actively seeking help to save their homes. Fay Servicing will pay up to $1.15 million to harmed borrowers and must stop its illegal practices. CFPB

April 2017

April 27 – The CFPB took action against four online lenders – Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. – for deceiving consumers by collecting debt they were not legally owed. The complaint was filed in federal court and alleges that the four lenders could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders. It also alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. CFPB

April 26 – The CFPB took action against Security National Automotive Acceptance Company (SNAAC), an auto lender specializing in loans to servicemembers, for violating a Bureau consent order. In 2015, the CFPB ordered SNAAC to pay both redress and a civil penalty for illegal debt collection tactics, including making threats to contact servicemembers’ commanding officers about debts and exaggerating the consequences of not paying. SNAAC failed to provide more than $1 million in refunds and credits, affecting more than 1,000 consumers. The CFPB’s order requires SNAAC to make good on the redress it owes to those consumers and pay an additional $1.25 million penalty. CFPB

April 20 – The CFPB sued one of the country’s largest nonbank mortgage loan servicers, Ocwen Financial Corporation, and its subsidiaries for years of widespread errors, shortcuts, and runarounds that cost some borrowers money and others their homes. Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance. Allegedly, Ocwen also illegally foreclosed on struggling borrowers, ignored customer complaints, and sold off the servicing rights to loans without fully disclosing the mistakes it made in borrowers’ records. CFPB

March 2017

March 23 – The CFPB took action against Experian and its subsidiaries for deceiving consumers about the use of credit scores it sold to consumers. Experian falsely claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. The CFPB ordered Experian to truthfully represent how its credit scores are used and pay a civil penalty of $3 million. CFPB

March 15 – 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 2017

February 7 – 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 – 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 – 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 2017

January 31 – 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 – 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 – 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 – 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 – 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 – 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

January 3 – The CFPB issued orders against Equifax, Inc., TransUnion, and their subsidiaries for deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers. The companies also lured consumers into costly recurring payments for credit-related products with false promises. The CFPB ordered TransUnion and Equifax to truthfully represent the value of the credit scores they provide and the cost of obtaining those credit scores and other services. Between them, TransUnion and Equifax must pay a total of more than $17.6 million in restitution to consumers, and fines totaling $5.5 million to the CFPB. CFPB

December 2016

December 20 – The CFPB sued Military Credit Services, LLC (MCS) for making loans with improper disclosures. This is the CFPB’s second enforcement action against MCS. In 2014, the CFPB and the states of North Carolina and Virginia sued the company for similar violations, and MCS was ordered to revise its contract disclosures in 2015. In today’s action, the CFPB ordered the company to ensure that its contracts comply with the law. It also required MCS to hire an independent consultant to review its practices and to pay a $200,000 civil penalty.  CFPB

December 19 – The CFPB filed federal lawsuits against four Virginia pawnbrokers for deceiving consumers about the actual annual costs of their loans. Spotsylvania Gold & Pawn, Inc., Fredericksburg Pawn, Inc., Pawn U.S.A., Inc., and A to Z Pawn, Inc. allegedly broke the law by misstating the charges associated with pawn loans. The CFPB seeks to end the pawnbrokers’ illegal practices, get restitution for the consumers they harmed, and impose penalties.  CFPB

December 16 – The CFPB took action against Moneytree, Inc., a financial services company that offers payday loans and check-cashing services, for misleading consumers with deceptive online advertisements and collections letters, and making unauthorized electronic transfers from consumers’ bank accounts. The CFPB has ordered the company to cease its illegal conduct, provide $255,000 in refunds to consumers, and pay a civil penalty of $250,000.  CFPB

December 7 – The CFPB issued orders against three reverse mortgage companies for deceptive advertisements, including claiming that consumers could not lose their homes. American Advisors Group, Reverse Mortgage Solutions, and Aegean Financial have been ordered to cease deceptive advertising practices, implement systems to ensure they are complying with all laws, and pay penalties.  CFPB

November 2016

November 21 – The CFPB filed a federal lawsuit against Access Funding, LLC for its illegal scheme in which victims of lead-paint poisoning and others were deceived into signing away future settlement payments in exchange for a significantly lower lump-sum payout. Access Funding allegedly steered victims to receive “independent advice” from a sham advisor – an attorney paid directly by the company – who indicated to consumers that the transactions required little scrutiny. The CFPB seeks to put an end to the company’s unlawful practices, obtain relief for the harmed consumers, and impose penalties.  CFPB

November 3 – The CFPB filed a federal lawsuit against B&B Pawnbrokers, Inc. for deceiving consumers about the actual annual cost of its loans. B&B Pawnbrokers allegedly broke the law by misstating the charges associated with pawn loans. The CFPB’s lawsuit seeks to end B&B Pawnbrokers’ illegal practices, get restitution for the consumers it harmed, and impose penalties.  CFPB

November 2 – The CFPB and New York Attorney General filed a lawsuit in a federal district court against the leaders of a massive debt collection scheme based out of Buffalo, New York. Douglas MacKinnon and Mark Gray allegedly operate a network of companies that harass, threaten, and deceive millions of consumers across the nation into paying inflated debts or amounts they may not owe. The CFPB is seeking to shut down this illegal operation and to obtain compensation for victims and a civil penalty against the companies and partners.  CFPB

October 2016

October 11 – The CFPB took action against Navy Federal Credit Union for making false threats about debt collection to its members, which include active-duty military, retired service members, and their families. The credit union also unfairly restricted account access when members had a delinquent loan. Navy Federal Credit Union is correcting its debt collection practices and will pay roughly $23 million in redress to victims along with a civil money penalty of $5.5 million.  CFPB

October 27 – The CFPB issued issuing warning letters to 44 mortgage lenders and mortgage brokers who may be in violation of requirements to collect, record, and report data about their housing-related lending activity under the Home Mortgage Disclosure Act.  CFPB

September 2016

September 27 – The CFPB took action against online lender Flurish, Inc., doing business as LendUp, for failing to give consumers the opportunity to build credit and provide access to cheaper loans, as it claimed to consumers it would. The company has been ordered to provide more than 50,000 consumers with approximately $1.83 million in refunds and pay a civil penalty of $1.8 million.  CFPB

September 26 – The CFPB took action against TitleMax parent company TMX Finance LLC for luring consumers into costly loan renewals by presenting them with misleading information about the deals’ terms and costs. The lender also used unfair debt collection tactics that illegally exposed information about debts to borrowers’ employers, friends, and family. TMX Finance was ordered to stop its unlawful practices and pay a $9 million penalty.  CFPB

September 23 – The CFPB filed a federal lawsuit against the credit repair company Prime Marketing Holdings, LLC alleging it charged consumers a series of illegal advance and also misrepresented the cost and effectiveness of its services. The CFPB is seeking to halt the company’s harmful conduct and to obtain relief for consumers, including refunds of fees paid to the defendant.  CFPB

September 21 – The CFPB sued five Arizona title lenders— Auto Cash Leasing, LLC; Interstate Lending, LLC; Oasis Title Loans, LLC; Phoenix Title Loans, LLC; and Presto Auto Loans, Inc. — for failing to disclose the annual percentage rate in online advertisements about title loans. The companies allegedly advertised a periodic interest rate for their loans without listing the corresponding annual percentage rate. The CFPB is seeking civil monetary penalties and administrative orders requiring the companies to correct their practices.  CFPB

September 12 – The CFPB took action against for-profit college chain Bridgepoint Education, Inc. for deceiving students into taking out private student loans that cost more than advertised. Bridgepoint has been ordered to pay an $8 million civil penalty, discharge all outstanding private loans the institution made to its students and to refund loan payments already made by borrowers. CFPB

September 8 – The CFPB fined Wells Fargo Bank, N.A. $100 million for the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts.  Wells Fargo employees opened more than 200 million accounts that may not have been authorized.  In addition to the $100 million CFPB penalty, the largest the CFPB has ever imposed, Well Fargo will pay full restitution to the victims and two other penalties totaling $85 million.  CFPB

August 2016

August 25 – The CFPB ordered First National Bank of Omaha to provide $27.75 million in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products. The bank used deceptive marketing to lure consumers into debt cancellation add-on products and charged consumers for credit monitoring services they did not receive. First National Bank of Omaha will also pay a $4.5 million civil money penalty to the CFPB.  CFPB

August 22 – The CFPB sued Wells Fargo Bank for illegal private student loan servicing practices that increased costs and unfairly penalized certain student loan borrowers.  The consent order requires Wells Fargo to pay at least $410,000 to compensate consumers for illegal late fees, improve its consumer billing and student loan payment processing practices, and pay a $3.6 million civil penalty to the CFPB.  CFPB

July 2016

July 14 — The CFPB ordered Santander Bank, N.A. to pay a $10 million fine for using a telemarketing vendor to deceptively market their overdraft service and sign certain bank customers up for the service without their consent.  CFPB

June 2016

June 30 — The CFPB’s supervisory actions from January to April 2016 uncovered illegal activities in auto finance and payments that led to approximately $24.5 million in restitution to more than 257,000 consumers.   CFPB

June 29 — The CFPB and DOJ took joint action against BancorpSouth Bank for discriminatory mortgage lending practices that harmed African Americans and other minorities.  The complaint alleges BancorpSouth engaged in numerous discriminatory practices, including illegally redlining in Memphis; denying certain African Americans mortgage loans more often than similarly situated non-Hispanic white applicants; charging African-American customers for certain mortgage loans more than non-Hispanic white borrowers with similar loan qualifications; and implementing an explicitly discriminatory loan denial policy. The proposed consent order seeks $4 million in direct loan subsidies in minority neighborhoods in Memphis, at least $800,000 for community programs, advertising, outreach, and credit repair, $2.78 million to African-American consumers who were unlawfully denied or overcharged for loans, and a $3 million penalty.  CFPB

June 6 — The CFPB took action against payment processer Intercept Corporation and two of its executives, Bryan Smith and Craig Dresser, for allegedly enabling unauthorized and other illegal withdrawals from consumer accounts by their clients.  The complaint alleges Intercept, Smith, and Dresser processed payments for clients without adequately investigating, monitoring, or responding to red flags that indicated some clients were breaking the law or deceiving customers.  CFPB

May 2016

May 26 — The CFPB filed a lawsuit against former Wells Fargo employee David Eghbali for orchestrating an illegal mortgage fee-shifting scheme.  Eghbali had an agreement with escrow company New Millennium Escrow, Inc. to reduce the escrow fees charged to his price-conscious customers and make up for the loss by overcharging other customers.  In return, Eghbali referred nearly all of his clients to New Millennium.  The scheme enabled Eghbali to close more loans and increase his commissions.  CFPB

May 11 — The CFPB took action against All American Check Cashing, Inc., which offers check cashing and payday loans, and its owner Michael Gray, for allegedly tricking and trapping consumers.  The complaint alleges that All American tried to keep consumers from learning how much they would be charged to cash a check, used deceptive tactics to stop consumers from backing out of transactions, made deceptive statements about the benefits of its high-cost payday loans, and also failed to provide refunds after consumers made overpayments on their loans.  CFPB

April 2016

April 25 — The CFPB ordered debt collection law firm Pressler & Pressler, LLP, principal partners Sheldon H. Pressler and Gerard J. Felt, and New Century Financial Services, Inc., a debt buyer, to stop churning out unfair and deceptive debt collection lawsuits based on flimsy or nonexistent evidence.  The orders also require the firm and the named partners to pay $1 million, and New Century to pay $1.5 million to the Bureau’s Civil Penalty Fund.  CFPB

April 21 — The CFPB filed a lawsuit against Dmitry Fomichev and Davit Gasparyan, co-founders of T3Leads, a lead aggregator that buys consumer information – called leads – from websites that market payday and installment loans. The complaint alleges their company did not vet or monitor its lead buyers, exploited consumers’ lack of understanding of the risks, costs, and conditions of the loans applied for, and put consumer information at risk of being trafficked for illegal purposes.  CFPB

March 2016

March 30, 2016 – The CFPB issued an order against student debt relief company, Student Aid Institute, Inc., and its chief executive officer, Steven Lamont, for, among other things, deceiving customers about how much they would save by using their services and misleading customers into believing that fees were required to participate in free federal student loan programs.  The company reaped millions of dollars in advance fees from thousands of customers as a result of these and other deceptions.  The order requires Student Aid Institute and Lamont to pay a penalty of $50,000, shut down the company’s debt relief services, cancel all contracts with customers and stop charging them for services. The company and Lamont are also permanently barred from the debt relief industry. CFPB

March 18, 2016 – A California district court ordered debt relief company Morgan Drexen, Inc., to pay $132,882,488 in restitution and a $40 million civil penalty for charging illegal upfront fees and deceiving consumers.  The order follows a preliminary injunction prohibiting the company from collecting any more money from customers and a default judgment entered against the company for misleading the court and “act[ing] willfully and in bad faith by falsifying evidence.”  The court’s findings regarding Morgan Drexen’s bad faith were based, in part, on testimony from a whistleblower who exposed the company’s conduct.   CFPB

March 15 – The CFPB requested a California district court to enter a final judgment and order banning Student Loan Processing.US and its sole owner, James Krause, from any future involvement in debt relief and student loan services.  The proposed order also requires the company to shut down all operations within 45 days of the judgment and to pay $8.2 million in refunds to thousands of harmed consumers – although most of that payment will be suspended due to the defendant’s inability to pay.  The CFPB’s lawsuit alleged that Student Loan Processing.US charged consumers illegal upfront enrollment fees before providing any services, deceived customers about the costs of their services, and falsely represented an affiliation with the DOE. CFPB

March 8 – 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 – 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 2016

February 23 – 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 — 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 2016

January 21 — 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 2015

December 28 — 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 — 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 — 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 — 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 — 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

December 3 — The CFPB ordered a nationwide credit reporting company, Clarity Services, Inc., to pay an $8 million penalty, halt its illegal practices, and improve the way it investigates consumer disputes and obtains, sells, and resells consumer credit reports. The company had illegally obtained consumer credit reports and failed to appropriately investigate consumer disputes. CFPB

November 2015

November 18 — The CFPB filed an administrative lawsuit against an online lender, Integrity Advance, LLC, and its CEO, James R. Carnes, for deceiving consumers about the cost of short-term loans. The suit seeks redress for harmed customers, injunctive relief, and a civil monetary penalty. CFPB

November 3 — CFPB supervisory actions between May 2015 and August 2015 resulted in $107 million in relief to more than 238,000 consumers for violations in the student loan servicing, mortgage origination and servicing, consumer reporting, and debt collection markets. CFPB

October 2015

October 29 — The CFPB ordered General Information Services and its affiliate,, Inc., two of the largest employment background screening report providers, to pay $10.5 million in relief to harmed consumers, and pay a $2.5 million civil penalty, for failing to take basic steps to assure the information they reported about job applicants was accurate. The serious inaccuracies reported potentially affected consumers’ eligibility for employment and caused reputational harm. CFPB