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Operation HOPE Global Forums Annual Meeting

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FOR IMMEDIATE RELEASE:
April 11, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

Prepared Remarks of Richard Cordray

Director, Consumer Financial Protection Bureau 

Operation HOPE Global Forums Annual Meeting

Atlanta, Ga.

April 11, 2017

Thank you John for your kind words. I am glad to be back in Atlanta for the HOPE Global Forum. It is great to be here with you and to know you share similar goals and ideals for our society. The thread that links the Consumer Financial Protection Bureau to Operation HOPE is the hard and important mission of empowering the economically vulnerable among us.

We are all aware that it is expensive to be poor. Even those who do have a job can work long hours for low wages and still not make enough to get by. And those shut out of the mainstream financial system may have to pay a big chunk of their income before they can even have the use of their own money.

Many of these same people are also blocked from access to credit. Our research shows that 45 million people do not have credit records that can be scored, and thus can be regarded as “credit invisibles.” Together, they make up almost one in five adults in this country, and are more likely to be African-American or Hispanic and to live in low-income neighborhoods.

A limited credit history also makes it harder to withstand financial shocks and achieve financial stability. When people face an emergency and have to borrow without access to traditional credit products, they may use higher cost alternatives to bridge the gap.

These things weigh heavily on people’s lives. The emotional cost is unknowable, but it no doubt produces mounting feelings of frustration and helplessness. The doctrines of equality that mark the aspirations of our political life in America can ring quite hollow in the economic realm.

Our country is founded on the principle of equal opportunity and the right to “life, liberty, and the pursuit of happiness.” We are nurtured by the promise of upward mobility and the notion that our society has done away with any formal class or caste system. We like to suppose that anyone, regardless of their beginnings in life, can climb the economic ladder through merit and hard work. As Horatio Alger described it in his “rags to riches” stories, we want to believe that with some “luck and pluck,” we can all hope to “strive and succeed.”

But in the non-fiction world, for too many people the concept of upward mobility is more of a tantalizing taunt than a tangible prospect. Economic injustices too often deny opportunity, drain wealth, and damage communities. They prolong and heighten the racial disparities that already exist in America.  For white households, median income is $60,000; for African-American households, it is $35,000. White households in America have an average net worth of $134,000, but African-American households average just $11,000. Home ownership and home values show similar patterns. We know how much Operation HOPE does to empower underserved communities across the country, and we thank you for your work.

At the Consumer Bureau, we too are working on behalf of the economically vulnerable and the financially disempowered. We embrace the principle of individual responsibility, yet we know it is not easy to climb the economic ladder if you have to start near the bottom. It helps greatly to have someone who is willing to hold the ladder steady. We can take on that important role, and help make sure it is as safe as possible to undertake that climb.

***

Today, I want to talk to you about the credit reporting market, which exerts a tremendous influence over people’s financial lives. Credit reports, also known as consumer reports, can make or break whether someone gets a car loan, a credit card, a bank account, or a mortgage – and the interest rate they have to pay. They can also affect whether someone can rent an apartment or get a job.

Credit reports and credit scores form a key foundation of people’s financial options, but they are not very transparent and often are poorly understood. We do not control our own fates, since we cannot vote with our feet by choosing another credit reporting company. Instead, it is mostly a business-to-business ecosystem where people have had little power to insist on better practices or fair treatment. Because of how credit reports affect our lives, we all need this industry to operate at the highest levels of quality and performance.

Five years ago, the Consumer Bureau became the first government agency to supervise the nationwide credit reporting companies. This means we can oversee all sides of the market, from the companies that collect our information to those that furnish it to them. So now we can hold the key parties responsible for their performance and ignore any finger pointing among them.

We are focused on improving data accuracy and the handling of consumer disputes. In the past, despite a statutory duty to produce accurate credit reports, industry practices produced an unacceptable number of errors. A Federal Trade Commission study found that millions of people had an error on at least one of their credit reports that was serious enough to materially affect their credit score.

Consumers also find it hard to get errors corrected, and may have little recourse if things go wrong. I recall the stories I heard in Ohio when we were working on credit freeze legislation. People told us it took them a long time to get any help, and some got none. They brought in shoeboxes full of records documenting the efforts they had made to seek help. Of course, some errors may be unavoidable even in the best of systems, but consumers should not have to jump through hoops to get their problems fixed.

When we first started supervising the credit reporting companies, we held a public field hearing in Detroit, and we set aside time to hear from witnesses about their own experiences. An elderly woman stood up and told us she had a problem. What was her problem? She told us, “the credit reporting companies think I am dead.” Although she had tried and tried to convince them otherwise, making repeated calls and sending in documentation, they continued to write her off.

Aside from the obvious absurdity of the situation, the basic “moral” of her story was striking: the whole situation was a profound affront to her dignity. As she spoke, she made clear her thought that if she were viewed as “somebody,” this would not be happening. Only by assuming that the companies viewed her as “nobody,” and as counting for nothing, could she explain to herself their stubborn indifference to her plight.

Let me tell you another story to show the kinds of problems people have with their credit reports. Jorge, in New York, submitted a complaint with our consumer response team. He had owned a small business in Miami, suffered unexpected financial setbacks, and filed for bankruptcy. He knew the bankruptcy would stay on his credit report for 10 years. But when the time was up, and he tried to rent an apartment, the information was still on his credit report. When he contacted the company, they gave him the runaround and told him he had to wait yet another year to get it changed. Like the elderly woman from Detroit, he felt invisible, as if he did not matter. These stories are keen reminders of why the work we are doing is so crucial.

***

Over the last five years, we have been scrutinizing the credit reporting companies to make sure they are obeying the law and to assess whether their practices pose risks to consumers. We have learned a great deal, but most importantly, we are working to correct the many problems we have found and to resolve matters that harmed consumers. We monitor and examine them the same ways we monitor and examine the biggest banks. This is a much more systematic approach than they have ever experienced before.

Our approach is comprehensive, also covering those that supply the credit reporting companies with people’s financial information. Disputes about the accuracy of information have gotten our attention. So we published a bulletin emphasizing that we will hold furnishers accountable for their duty to investigate disputes. We also made clear that they must review all relevant information they have about the dispute, including documents from consumers. This may sound obvious, but we published the bulletin because we found it was not the normal practice.

Recently, we released a report on how our work is moving the needle in a positive direction. It describes how we are pushing the credit reporting companies and the furnishers to fix data accuracy and dispute handling. Let me describe some of the work we have been doing.

First, we have pressed the companies to improve their quality control systems, which we found were either rudimentary or non-existent. Improvements include testing to identify whether credit reports are being produced for the wrong consumers or contain mixed-up files. Companies are also taking more systematic approaches to correct errors, to prevent them from happening again.

Second, we have made it easier for consumers to dispute errors on their credit reports. We had found some serious failures in this process. Although the law requires companies to notify consumers about the results of dispute investigations, the notification letters did not clearly explain the changes made as a result of the dispute. That is totally unacceptable. We also found, shockingly, that companies were failing to consider the documentation people provided to support their side of the story. Our directives are making them do a better job of investigating disputes and providing more complete responses to consumers.

Third, we are cleaning up the information the credit reporting companies receive in the first place. Our examinations found widespread problems with the ways that banks and financial companies furnish this information, including errors and inadequate processes for fixing errors when they are disputed. The companies are making specific changes and devoting more resources to address these issues.

When our examiners find violations of law, they direct the companies to fix things for the consumers by correcting the errors and getting back money they lost. They also direct the companies to change things for the future. In some cases, as appropriate, this leads to enforcement actions. Recently, for example, we brought enforcement actions against each of the three largest credit reporting companies for deceiving consumers about the actual cost and the uses made of the credit scores sold to them. We also took an enforcement action against Wells Fargo for failing to update or correct inaccurate, negative information reported to the credit reporting companies about student loans.

So we are closely focused on the important issues of data accuracy and dispute handling. Our work here is far from done, but the importance of what we are doing for consumers is enormous.

***

Another way to help improve the credit reporting market is to get consumers more directly involved. People are generally in the best position to know whether the information that is collected and sold about them is accurate and complete. So we are working to improve the market by working to empower consumers. We continue to educate people about the importance of checking their credit reports, their right to a free annual report, and how to dispute errors in their reports. If people are better able to monitor their information for accuracy, then both the credit reporting companies and the furnishers will become more responsive and responsible to the public. This means turning the established “business-to-business model” of credit reporting to focus more squarely on the needs and rights of consumers.

To help people access their credit scores, we have championed the Open Credit Score initiative and related measures that are making credit scores more readily available to consumers at no cost. More than a decade ago, people were given the legal right to a free credit report from each of the three largest credit reporting companies and others every year, but usually they still had to pay to get their credit scores. The Open Credit Score initiative is now making free credit scores regularly available to tens of millions of Americans, and the number is growing fast. And when people notice an unexpected change in their score, they are likely to try to find out why and to learn more about what steps they can take to improve their score, including disputing any errors. This puts consumers in a better position to stand up for themselves in all of these ways.

We are also informing consumers about the availability of free credit scores. We are doing this by publishing a list of companies that have informed the Bureau that they offer their credit card customers free and ready access to one or more of their credit scores. Some have gone further and now offer this same service to all consumers, whether or not they are existing customers. The Open Credit Score Company List is available on our website at consumerfinance.gov. If other companies are providing this service and wish to be added to the list, we will do so.

We recognize that consumers who do not have credit cards also need better access to their credit scores. So we have worked to ensure that nonprofit financial and credit counseling agencies can share the credit reports they purchase on behalf of their clients directly with their clients as well.

***

Our ultimate vision is a credit reporting market based on highly accurate information, where consumers who dispute erroneous information can get their disputes resolved timely and effectively. Making it easier for people to monitor their own credit reports and credit scores to strengthen their financial foundation is a key part of that vision, as is making sure they are treated fairly when they seek credit to improve their lives. We and you share this vision.

As John Hope Bryant has told me many times, these goals help people achieve the American dream of prosperity for themselves and their families and give a leg up to the next generation. Access to affordable, responsible credit is essential to put us on the pathway to success.

We are helping Americans climb the economic ladder by working to fix the systems that make it unsteady. Government has a vital role in making sure these systems are working properly, where individual citizens cannot do so on their own. People who are underserved or having financial problems deserve fair opportunities to move forward in life. Our ultimate goal is to recognize the dignity and worth of every American and make sure every consumer counts. This is entirely in harmony with the important work that Operation HOPE does each day to help people improve their credit reports and raise their credit scores. Much more remains to be done, but now we can do it together, which makes a very big difference. Thank you.

###

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
cigar rights

PRESS RELEASE: Cigar Smokers Rights Guide

 

SOURCE: Famous Smoke Shop
Famous Smoke Shop
March 30, 2017 05:00 ET
Top Premium Cigar Retailer Launches Cigar Smokers’ Rights Guide;
Famous Smoke Shop Details Effects of Newly-Enacted FDA Cigar Regulations

 

http://fda.famous-smoke.com/
EASTON, PA–(Marketwired – March 30, 2017) – Famous Smoke Shop, the leading online distributor of discounted premium cigars, has debuted their new interactive Cigar Smokers’ Rights Hub. Crafted in response to the US Food & Drug Administration’s 2016 Final Deeming Rule regarding premium cigars and other tobacco products, the Famous Smoke guide presents cigar enthusiasts with a history of legal actions affecting the tobacco industry. The Smokers’ Rights Hub also offers cigar smokers a detailed understanding of how FDA’s new regulations will negatively impact the premium cigar industry, and the legal challenges that have been mounted against the agency’s sweeping new rules.
“The rights of adult cigar enthusiasts to purchase and enjoy a completely legal product are quickly going up in flames.” Arthur Zaretsky is the president and owner of Famous Smoke Shop, who has launched a Cigar Smokers’ Rights Hub — a website devoted to educating consumers about the Food & Drug Administration’s Final Deeming Rule concerning premium cigars. FDA released 499 pages of new and strict cigar regulations in August of 2016, filled with measures, rulings, definitions and fees that “completely overstepped the authority FDA was given by Congress to regulate tobacco,” says Zaretsky. His company’s goal is to inform customers — and cigar enthusiasts at large — about how these rules are shortchanging consumers, unfair to business and in violation of US law. “The agency is going at this regulation, and the costs associated with compliance, blindly. FDA has failed to perform an adequate, legitimate cost-benefit analysis of the Final Rule’s economic impact on small businesses, as is required by the Regulatory Flexibility Act,” says Zaretsky, who adds, “the FDA is defying the law.”
The Smokers’ Rights Hub notes significant factors that distinguish cigars from cigarettes. Their contents, and how their made, are vastly different, says Cigar Advisor Managing Editor John Pullo: “premium cigars are made entirely by hand, with whole tobacco leaf. Cigarettes are vastly different — they’re made on high speed machines, in bulk, using chopped tobaccos and additives. Cigars and cigarettes are very different, and shouldn’t be treated the same way.” In spite of those differences, FDA is now regulating premium cigars in the same way as cigarettes — and has put into place significant restrictions on the blending of new cigars, levying of fees on cigar makers to have their products chemically tested and kept on the market for sale, as well as reclassifying retailers as “manufacturers” for selling cigar samplers and house pipe blends. These vast new changes have prompted the premium cigar industry to sue the FDA on Constitutional grounds.
The history of modern governmental regulation over tobacco stretches 50 years, according to the Cigar Smokers’ Rights timeline. “All the while, the federal government has slowly — and quite frankly, unfairly — been chipping away at cigar smokers’ rights,” says Zaretsky. Because these new regulations are such a broad overreach of the regulatory authority granted to FDA by Congress in 2009, three industry groups have filed suit against the agency to have the Deeming Rule rescinded. Mark Pursell, CEO of the International Premium Cigar and Pipe Retailers Association, noted in a statement: “After a thorough and detailed legal review, we are challenging this unlawful regulatory action in federal court to protect the statutory and constitutional rights of our industry and its members.” Cigar Association of America President Craig Williamson added, “We hoped the FDA would craft a flexible regulatory structure that accounted for the uniqueness of our industry. Instead, we got a broad, one-size-fits-all rule that fails to account for how cigars and premium cigars are manufactured, distributed, sold and consumed in the United States. The FDA exceeded its statutory authority and violated the federal rulemaking process when crafting this set of broad and sweeping regulations.”
The details of this suit, along with regular updates on additional filings and motions, are currently posted at the Famous Smoke Shop Cigar Rights site, so that consumers can follow the industry’s fighting against FDA’s massive regulatory changes.
The new Famous Smoke Shop Cigar Smokers’ Rights Hub details many of the changes the FDA has made regarding their tobacco enforcement measures, including how premium cigars will become more expensive, due to the added costs of FDA approval fees being passed to retailers and consumers. The Hub also lays out how the selection of cigars currently available for sale will likely become smaller, as the new FDA rules will force some existing brands off the market — while limiting the influx of new cigars on store shelves: “that rich tradition of Innovation by cigar makers will be stifled,” says Cigar Advisor’s John Pullo. This, he says, is why cigar lovers can educate themselves with the helpful service that Famous provides. “We as cigar enthusiasts need to empower ourselves with information about the regulation of our hobby, and about the steps being taken by the FDA to unfairly limit our choices at the cigar shop and online. A resource like the Rights Hub is critical to becoming a well-informed consumer.”

 

About Famous Smoke Shop
Famous Smoke Shop is the #1 American-owned discount cigar retailer, home to the lowest prices on the largest selection of premium cigars, humidors and cigar accessories in the country. With over one thousand cigar brands in stock, including Acid, Davidoff, Macanudo, Romeo y Julieta, Ashton, Padron, Oliva and Perdomo cigars, cigar smokers shop at Famous Smoke Shop with confidence: every purchase is backed by the Famous Freshness Guarantee and award-winning customer service. Famous remains committed to educating each and every adult customer on their right to enjoy tobacco products responsibly.
CONTACT INFORMATION:
Famous Smoke Shop
90 Mort Drive
Easton, PA 18040
800-564-2486

 

consumer financial protection bureau

Consumer Financial Protection Bureau Fines Experian $3 Million for Deceiving Consumers in Marketing Credit Scores

CFPB logo

FOR IMMEDIATE RELEASE:
March 23, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

CONSUMER FINANCIAL PROTECTION BUREAU FINES EXPERIAN $3 MILLION FOR DECEIVING CONSUMERS IN MARKETING CREDIT SCORES
Credit Reporting Company Misstated How Credit Scores It Sold Were Used

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) today took action against Experian and its subsidiaries for deceiving consumers about the use of credit scores it sold to consumers. Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. In fact, lenders did not use Experian’s scores to make those decisions. The CFPB ordered Experian to truthfully represent how its credit scores are used. Experian must also pay a civil penalty of $3 million.

“Experian deceived consumers over how the credit scores it marketed and sold were used by lenders,” said CFPB Director Richard Cordray. “Consumers deserve and should expect honest and accurate information about their credit scores, which are central to their financial lives.”

Experian, based in Costa Mesa, Calif., is one of the nation’s three largest credit reporting agencies. Experian markets, advertises, sells, offers, and provides credit scores, credit reports, credit monitoring, and other related products to consumers and third parties. Credit scores are numerical summaries designed to predict consumer payment behavior in using credit. Many lenders and other commercial users consider these scores when deciding whether to extend credit. No single credit score or credit scoring model is used by every lender. In addition to the credit scores that are actually used by lenders, several companies have developed so-called “educational credit scores,” which lenders rarely, if ever, use. These scores are intended to inform consumers.

Experian developed its own proprietary credit scoring model, referred to as the “PLUS Score,” which it applied to information in consumer credit files to generate a credit score it offered directly to consumers. The PLUS Score is an “educational” credit score and is not used by lenders for credit decisions. From at least 2012 through 2014, Experian violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by deceiving consumers about the use of the credit scores it sold. In its advertising, Experian falsely represented that the credit scores it marketed and provided to consumers were the same scores lenders use to make credit decisions. In fact, lenders did not use the scores Experian sold to consumers. In some instances, there were significant differences between the PLUS Scores that Experian provided to consumers and the various credit scores lenders actually use. As a result, Experian’s credit scores in these instances presented an inaccurate picture of how lenders assessed consumer creditworthiness.

Experian also violated the Fair Credit Reporting Act, which requires a credit reporting company to provide a free credit report once every twelve months and to operate a central source – AnnualCreditReport.com – where consumers can obtain their report. Until March 2014, consumers getting their report through Experian had to view Experian advertisements before they got to the report. This violates the Fair Credit Reporting Act prohibition of such advertising tactics. 

Enforcement Action
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the consent order, Experian must:

  • Pay a $3 million penalty: Experian must pay a civil money penalty of $3 million to the Bureau’s Civil Penalty Fund.
  • Truthfully represent the usefulness of credit scores it sells: Experian must inform consumers about the nature of the scores it sells to consumers.
  • Put in place an effective compliance management system: Experian must develop and implement a plan to make sure its advertising practices relating to credit scores and on Internet webpages that consumers access through AnnualCreditReport.com comply with federal consumer laws and the terms of the CFPB’s consent order. 

The full text of the CFPB’s Consent Order against Experian is available here:http://files.consumerfinance.gov/f/documents/201703_cfpb_Experian-Holdings-Inc-consent-order.pdf

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Press Release: Sevilla Local Media in Association with Mad House – Atlantic Recording Artist, Cham (“Baby Cham”)

March 20, 2017

 

Sevilla Local Media, LLC

(951) 289-1710

sevillalocalmedia@gmail.com

www.sevillalocalmedia.com

 

For Immediate Release:

Sevilla Local Media, a Riverside, California, based Digital Marketing & SEO Company that also manages and promotes a select stable of recording artists, announces an official association with CHAM (Damian Beckett), more famously known as BABY CHAM, specific to marketing, promotion and booking.

Sevilla Local Media is now part of Team Cham and will begin by increasing the visibility of Cham’s career and the his new single, “Money Wine”

Cham will be appearing live in select California venues in May 2017.

For booking and all other inquiries regarding CHAM, please contact TOMMY SEVILLA at the contact information noted above.

 

 

From Wikipedia:

Cham (born Damian Beckett, 24 February 1979) is a Jamaica born rapper, singer-songwriter and actor, most well known for his 2006 single “Ghetto Story” from his major label debut album of the same name, a song which led to multiple “story” songs by other artists in a similar vein.[1] He is currently signed to Atlantic Records, and was known as Baby Cham until 2005. He is still called Baby Cham by his Jamaican fans and fans from around the world.

Originally from Sherlock Crescent in Saint Andrew Parish, Cham’s career began in the early 1990s.[2] The Miami New Times referred to his debut album Wow… The Story, released in 2000, as “the most anticipated album in years from any reggae artist”, and a Washington Post review of a live Cham concert in 2006 described him as “the man who may be the next Sean Paul — a dancehall artist who crosses over to the U.S. hip-hop market.”[3][4]

Throughout his career, Cham has collaborated with many hip hop and R&B artists such as Foxy Brown, Alicia Keys, Carl Thomas, Shawn Mims, Mis-Teeq, Rihanna, Che’Nelle, Jentina, Akon, and T-Pain, Keke Palmer and many others.

Cham has for a long time worked with producer Dave Kelly.[2] In 2012, he recorded with his wife, O, on the singles “Wine” and “Tun Up”.[2] In 2013 he released the Kelly-produced single “Fighter”, featuring Damian “Junior Gong” Marley.[5]

Cham’s third album, the Kelly-produced Lawless is due to be released in June 2015.[6] Featuring the single “I Am Hot”, the album was recorded in Florida apart from a collaboration with Mykal Rose and Bounty Killer, which was recorded in Jamaica.[6]

 

sevilla local media

Cigar & Spirits Magazine’s 7th Annual West Coast Cigar & Spirits Tasting

cigar and spirits magazine

 

 

 

 

 

www.CigarandSpiritsMagazine.com

It’s that time of the year again!
Come and sample some of the world’s greatest spirits and cigars at the 7th Annual Cigar & Spirits West Coast Tasting event! You’ll take home hundreds of dollars worth of premium samples.
Past Vendors have included:
Arturo Fuente Cigars
Rocky Patel
Drew Estate
Ventura Cigar Company
La Palina
Falto
Garo Habano
Montecristo
Romeo y Julieta
Gurkha
JC Newman – Diamond Crown
Aging Room
Villiger
Trill Cigars
Royal Gold Cigars
Dignity
Southern Draw Cigars
Zander-Greg
Altadis USA
Alec Bradley Cigars
Boutique Blends
Esteban Carreras Cigars
Miami Cigar Company
La Aurora Cigars
Hiram & Solomon Cigars
USA Sales
Zander Greg
Alpha Cigar

Ketel One Vodka
Beam Global
Zacapa Rum
Makers 46
El Tesoro Anejo
2 Gingers Irish Whiskey
Dos Armadillos
Comisario
Sensi Wines
Tatratea
Sazerac
Buffalo Trace Small Batch Bourbon
Buffalo Trace White Dog
Fireball Whisky
Eagle Rare 10YR Bourbon
Diageo
Johnnie Walker
Oban Whisky
Talisker Whisky
Lagavulin Whisky
Deep Eddy Vodka
NOLET’S Silver Gin
Zing Vodka
A. Hardy Brands
Hardy VSOP Cognac
Hardy XO Cognac
Dingle Irish Gin
Michael Goddard Vodka & Gin
Mexican Moonshine
T1 Tequila
Titos Handmade Vodka
Macallan

Buzz Bars
Hangar 24 Brewing Co
Backyard Marys
Balls of Steel
Left Shoe Company
Never Hungover

 

Buy Tickets Now!

CONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION AGAINST NATIONSTAR MORTGAGE

CFPB logo

FOR IMMEDIATE RELEASE:
March 15, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

CONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION AGAINST NATIONSTAR MORTGAGE FOR FLAWED MORTGAGE LOAN REPORTING
Bureau’s $1.75 Million Civil Penalty for Persistent and Substantial Reporting Errors is the CFPB’s Largest Penalty to Date for HMDA Violations

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today 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. Today’s action is the largest HMDA civil penalty imposed by the Bureau to date, which stems from Nationstar’s market size, the substantial magnitude of its errors, and its history of previous violations. In fact, Nationstar had been on notice since 2011 of HMDA compliance problems. In addition to paying the civil penalty, Nationstar must take the necessary steps this time to improve its compliance management and prevent future violations.

“Financial institutions that violate the law repeatedly and substantially are not making serious enough efforts to report accurate information,” said CFPB Director Richard Cordray. “Today we are sending a strong reminder that HMDA serves important purposes for many stakeholders in the mortgage market, and those required to report this information must make more careful efforts to follow the law.”

Nationstar, a nationwide nonbank mortgage lender headquartered in Coppell, Texas, is a wholly owned subsidiary of Nationstar Mortgage Holdings Inc. With nearly 3 million customers, Nationstar Mortgage Holdings is a major participant in the mortgage servicing and origination markets. The company and its subsidiaries earn fees through servicing, origination, and other real estate-based services. According to 2014 data, Nationstar was the ninth-largest HMDA reporter by total mortgage originations, the sixth largest by applications received, and the 13th largest by money lent. From 2010 to 2014, Nationstar’s number of HMDA mortgage loans increased by nearly 900 percent.

The Home Mortgage Disclosure Act of 1975 requires many mortgage lenders to collect and report data about their mortgage lending to appropriate federal agencies and make it available to the public. Federal regulators, enforcement agencies, community organizations, and state and local agencies can use the information to monitor whether financial institutions are serving housing needs in their communities. It also helps direct public-sector investment to attract private investment to areas where it is needed. And the data is used to help identify possibly discriminatory lending patterns, and compliance with the Equal Credit Opportunity Act, the Fair Housing Act, and the Community Reinvestment Act. Inaccurate HMDA data can make it difficult for the public and regulators to discover and stop discrimination in home mortgage lending or for public officials and lenders to tell whether a community’s credit needs are being met.

As part of its supervision of larger banks and nonbank mortgage lenders, the CFPB reviews the accuracy of HMDA data and the adequacy of HMDA compliance programs. In 2013, the CFPB issued a bulletin putting mortgage lenders on notice about the importance of submitting correct mortgage loan data. The CFPB has conducted HMDA reviews at dozens of bank and nonbank mortgage lenders, and has found that many lenders have adequate compliance systems and produce HMDA data with few errors.

However, in its supervision process, the CFPB found that Nationstar’s HMDA compliance systems were flawed, and generated mortgage lending data with significant, preventable errors. Nationstar also failed to maintain detailed HMDA data collection and validation procedures, and failed to implement adequate compliance procedures. It also produced discrepancies by failing to consistently define data among its various lines of business. Nationstar has a history of HMDA non-compliance. In 2011, the Commonwealth of Massachusetts Division of Banks reached a settlement with Nationstar to address HMDA compliance deficiencies. The samples reviewed by the CFPB showed substantial error rates in three consecutive reporting years, even after that settlement was reached. In the samples reviewed, the CFPB found error rates of 13 percent in 2012, 33 percent in 2013, and 21 percent in 2014.

The CFPB’s Order requires Nationstar to:

  • Pay a $1.75 million penalty: Nationstar will pay a $1.75 million penalty to the CFPB’s Civil Penalty Fund.
  • Develop and implement an effective compliance management system: Nationstar will assess and undertake any necessary improvements to its HMDA compliance management system to prevent future violations. 
  • Fix HMDA reporting inaccuracies: Nationstar must review, correct, and make available its corrected HMDA data from 2012-14.

Since the CFPB’s examination, Nationstar has been taking further steps to improve its HMDA compliance management system and increase the accuracy of its HMDA reporting.

In 2015, the CFPB published a rule updating HMDA data collection and reporting. This rule will improve the quality and type of data that is collected and reported, and shed more light on consumers’ access to credit. Most of the rule’s provisions take effect on Jan. 1, 2018. The CFPB’s action against Nationstar relates to data for 2012-14, which was collected and reported under the rule that predates the CFPB.

The full text of the order is available at: http://files.consumerfinance.gov/f/documents/201703_cfpb_Nationstar-Mortgage-consent-order.pdf

The CFPB’s HMDA Bulletin can be found at: http://files.consumerfinance.gov/f/201310_cfpb_hmda_compliance-bulletin_fair-lending.pdf

The CFPB’s HMDA Resubmission Schedule and Guidelines can be found at: http://files.consumerfinance.gov/f/201310_cfpb_hmda_resubmission-guidelines_fair-lending.pdf

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Prepared Remarks of Richard Cordray, Director, Consumer Financial Protection Bureau – LendIt USA Conference

 

 

 

 

 

FOR IMMEDIATE RELEASE:
March 6, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

Prepared Remarks of Richard Cordray
Director, Consumer Financial Protection Bureau

LendIt USA Conference

New York, N.Y.
March 6, 2017

I am glad to be with you today to hear firsthand about the latest innovations in consumer financial services. These innovations seem to be generating considerable interest and optimism about the future. They are driving new services for consumers and transforming how they conduct their finances. At the Consumer Financial Protection Bureau, we want to help channel these cutting-edge approaches in positive directions. Our goal is to put consumers first and provide them with more tools to take control of their financial lives. And we want you to share this vision as well.

As many of you know, the Consumer Bureau is the single federal agency with the sole mission of protecting consumers in the financial marketplace. This includes monitoring the rapid changes that new technologies are spurring in transactions, lending, underwriting, and money management, among other things. As we track how these changes evolve, we will be keeping consumers top of mind as this all plays out.

My remarks will focus on three broad areas of special interest to the Bureau. First, our Project Catalyst initiative is familiar to many of you, yet I will begin by describing the approach we take to encouraging consumer-friendly innovations in consumer finance. Second, we are carefully considering the issue of consumer control over their personal financial data. Third, we are looking into the benefits and risks of using unconventional sources of data to underwrite loans as a way to open access to credit for more consumers.

In general, however, I will note two overarching principles that the Bureau seeks to uphold in all these areas. First, we believe in a level playing field for all providers of consumer financial products and services. Evenhanded oversight of all providers – whether they are large banks or fintech startups – is a basic rule of the road for effective regulation of the financial marketplace. Nobody gets a free pass to exploit regulatory arbitrage; everyone must be held to the same standards of compliance with the law. Second, we strongly urge all providers to make sure that consumer protections are built into emerging products and services, right from the start. Consumer protections and compliance should not be mere add-ons or afterthoughts; they must be essential elements of the business model, from beginning to end.

We all have a vested interest in fostering a marketplace where consumers can understand and access the kinds of responsible products they can rely on throughout their financial lives. And the information consumers need to make decisions about their economic opportunities must be accessible, accurate, and reliable. You are in position to play a large role in helping all American consumers achieve key components of this overarching vision.

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Let me offer an overview of efforts we are making to encourage innovations in the financial marketplace that will lead to products and services that are more accessible, more affordable, and more convenient for consumers. Our major initiative here is our Project Catalyst, which brings us face to face with many of you. It operates on the principle that markets work best when they are wide open to competition from new ideas. As Linus Pauling, who won two Nobel prizes, once said, “The best way to come up with a good idea is to come up with a lot of ideas.”

From early on, we have made it a priority to engage with financial innovators. We are regularly gleaning insights from industry pilot programs, devising policies to promote consumer-friendly innovation, and listening to the hopes and fears of the innovators themselves. Project Catalyst hosts an “Office Hours” program where we engage with startups, nonprofits, banks, and other financial companies. We are learning about what does and does not work for consumers and the potential challenges facing entrepreneurs and investors. If you want to learn more about our programs supporting financial innovation, please join us at a future Office Hours event.

Project Catalyst also conducts research pilot programs with companies both large and small to inform our understanding of emerging issues. To date, these include a pilot to encourage savings and a pilot to improve the effectiveness of early-intervention credit counseling, among others. We continue to receive and review new pilot ideas for consumer-friendly innovations or research questions, and we urge you to consider working with us in this way.

Project Catalyst is also devising new policies to foster innovations. Our Trial Disclosure Waiver Policy allows financial providers to develop new technologies and innovative approaches for designing and testing alternative consumer disclosures. We encourage you to consider working with us to test new disclosures that could promote greater transparency, improve consumer understanding, or reduce costs. Project Catalyst also administers our “no-action letter” policy, which is intended to help promote novel products that may not fit neatly within the existing regulatory structure, yet may yield significant consumer benefits. A no-action letter would state that Bureau staff does not intend to recommend any supervisory or enforcement action based on these particular innovations for a defined period. The purpose of the policy is to mitigate regulatory risk for products that promise substantial consumer benefit, where there is substantial uncertainty about how they may be viewed under existing law.

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Utilization of data in the financial marketplace is rapidly evolving. Many of these developments are changing and improving the way consumers manage money and direct their financial affairs, but they have not been without risk to consumers. So we want to understand how consumers and third parties are accessing and using that data, and how it fuels new innovations. We also are deeply interested in how consumers are exercising control over their personal financial data, including the data that is maintained by their financial institutions.

Many of these innovations rely on access to current information drawn from the assets, balances, and transactions in people’s financial accounts. These include savings and checking accounts and, for those who have them, investment, mortgage, credit card, auto loan, or student loan accounts. In each case, by helping them budget or obtain credit, the information recorded about them can be a valuable asset. Indeed, it may matter as much or more to their financial situations than the dollars they actually have in their accounts at any given time.

In November, we issued a Request for Information to inquire about the challenges consumers face in accessing, using, and securely sharing their financial records. We seek to identify whether barriers exist between consumers and the personal data that their financial providers maintain about them. And we want to hear solutions from stakeholders that can help address the risks and technological challenges posed by consumers who want to have ready access to this data and to share it electronically with third parties. We are keenly aware of the serious issues around privacy and security, for consumers and providers alike. One pressing issue is how to satisfy the demands of consumers without exposing the providers that maintain this data to undue costs and risks. Another pressing issue is how to prevent consumers from subjecting themselves to undue risks, including the possibility that their data could be misused.

Over the past few months, we have received about 70 comments from financial institutions, data aggregators, companies that use aggregated data, trade associations, consumer groups, and individuals. We are sifting through the comments, which are extensive and thoughtful. They present a wide range of ideas about how best to achieve the broad goals we have in mind.

Certain perspectives presented in the comments are not surprising. Banks and other financial companies raise concerns about consumer data security and offer solutions that may address those concerns. Aggregators and users of the data, by contrast, are recommending less fettered access and greater freedom to store and use the data that consumers permit them to collect. This would give them more flexibility to enhance their services and their business models. Almost everyone is offering justifications that their approach will better protect the interests of consumers. At stake is how consumers can control what data is shared, and whether security or other concerns should restrict how it is shared, with whom, how often, and for what purposes.

So there is much to digest, and we see the market moving quickly, with high stakes for all involved. Even as we speak, vigorous and spirited negotiations are underway throughout the industry that could shape the future of information access. We expect the interests of consumers to be at the forefront of these discussions. Yet we remain concerned about reports of some institutions that may be limiting or restricting access unduly.

For our part, the Consumer Bureau will continue to analyze these issues and closely follow developments. We will take action as needed to make sure that consumers can safely access and share information about their financial lives, that providers and aggregators act in accordance with their instructions, and that financial institutions have their legitimate interests appropriately protected. We recognize that data access makes it possible to realize the many benefits of competition and innovation. We will be drawing heavily on the technological expertise and insight of the various stakeholders, and we will test their arguments and explanations directly against one another. Above all, we will insist that the consumer is the focus, not the football, as this process unfolds. So we look forward to further productive engagement with all parties to find solutions that will put consumer interests first.

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I also want to update you on our latest actions to encourage the use of new types of data that can open up credit opportunities for more consumers. Computer-enabled data analysis, for example, has the potential to provide greater insights into the financial patterns of the underserved – their inflows and outflows, and the ways they manage the gaps. Thoughtful and responsible use of financial data about individuals could expand the credit available to underserved consumers. If it is possible to expand opportunity in this manner, it would benefit not only these consumers, but perhaps would buoy the economy in ways that benefit us all.

So last month we launched an initiative to learn more about issues raised by new technologies and new uses of data. In particular, we issued a Request for Information about the potential benefits and risks of using, applying, and analyzing unconventional sources of information to predict people’s creditworthiness. We want to know whether various types of this so-called “alternative data” can help more consumers build their credit histories and gain more access to credit.

Just what consumers are we talking about here? As a self-described “data-driven agency,” naturally the Consumer Bureau has dug into the data to gain a deeper understanding. After crunching the numbers, we estimate that 26 million Americans are “credit invisible,” meaning they have no credit history at all. Another 19 million people have credit histories that, under most models, are too limited or have been inactive for too long to generate a reliable credit score.

That means about 45 million adults nationwide fall into these two categories. For every one of them, managing the ways and means of their lives usually costs more, risks more, takes longer, and does less to build their financial futures than is true for most consumers. That is simply a tragedy in a modern economy and a modern financial system like ours, and we all need to think harder about what we can do to address it. Certain longstanding products, such as secured credit cards, can provide part of the answer and should be actively offered to these consumers.

As many of you are well aware, alternative data may draw from sources such as rent or utility payments, which in general have not been traditionally defined as “credit.” It may draw from electronic or other records of transactions, such as deposits, withdrawals, or account transfers. And it might include other personal information, such as the consumer’s occupation or educational attainment. Other forms of alternative data may spring from new sources that never existed before, such as the use of mobile phones or the Internet. By filling in more details of people’s financial lives, this information may paint a fuller and more accurate picture of their creditworthiness. So adding alternative data into the mix may make it possible to open up more affordable credit for millions of additional consumers.

Through a Request for Information issued last month, we are looking at the pros and cons of using the types of alternative data available today, and what the future may hold as technologies continue to evolve. We are looking at how this information is gathered and analyzed in the underwriting models now used by banks and other financial companies, including the fintech companies. And we are seeking to better understand how all of this is beginning to unfold.

Some of the main inquiries we posed are these. First, can the use of alternative data to create or augment individual credit scores increase access to credit for consumers by helping lenders better assess their creditworthiness? Second, will this lead to more complex lending decisions for both industry and consumers, and what risks would that pose? Third, how might the use of alternative data, new modes of analysis, and new technologies affect costs and services in making credit decisions? Certainly it could mean a faster application process, lower operating costs for lenders, and lower loan costs for borrowers, all of which could benefit consumers. Fourth, what forms of alternative data might be prone to errors, and how hard will it be for consumers to identify such errors and get them corrected? Finally, and quite significantly, how may the use of alternative data affect certain groups or behaviors in ways that might run afoul of the fair lending laws or create other risks for vulnerable consumers?

We are hearing from innovators who want to expand access to credit or offer credit at lower interest rates to borrowers whose credit scores may understate their ability and willingness to repay. And we see promise in some consumer-friendly innovations that bring new products to those who had been locked out or underserved by the banking system and existing credit models. These approaches also pose risks, and we want to know more about these risks and how they can be mitigated or minimized. On the whole, we are encouraged by the potential for alternative data underwriting to benefit the very consumers that the fair lending laws are designed to protect. So we welcome you all to the frank and wide-ranging discussion we have begun on this subject. We are eager to hear your experiences and perspectives, and we encourage you to reach out to us.

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We will continue to engage with you and others to work through these issues. As we want to make clear, everyone who provides consumers with financial products and services must adhere to the same standards and be held accountable under the law. So as we move forward, we will have one eye on protecting consumers and the other on encouraging innovations to improve their lives. As is always the case, the long-term interests of your businesses depend on delivering great value and customer service. In these ways, our goals intersect. So let us travel this course together, and consider how we can direct our paths toward a better world for many millions of American consumers. Thank you.

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

MLB Blogger Roberto Angotti Joins the Big Leagues with Team Italy in the 2017 World Baseball Classic

Having received Top 10 MLB.com Fan Website recognition for the past five years, MLB blogger Roberto Angotti has been selected by Federazione Italiana Baseball Softball (FIBS) to report on Team Italy in the 2017 World Baseball Classic. His articles are now exclusively available on the FIBS English language website (www.FIBS.it/en) and also on the Italian American Baseball Family website (www.IABF.it).

For frequent updates on Team Italy throughout the 2017 World Baseball Classic, visit the various social media sites for FIBS (facebook/twitter/instagram) and the Italian American Baseball Family (facebook/twitter/instagram).

Facing Latin American powerhouses Mexico, Venezuela and Puerto Rico, Team Italy is once again the underdog when the extremely competitive WBC Pool D action begins on March 9, 2017 at Estadio de Beisbol Charros de Jalisco in Guadalajara, Mexico. Prior to heading south of the border, Team Italy will play exhibition games against the Chicago Cubs on March 7th and the Oakland A’s on March 8th in Mesa, Arizona. During all games, social media followers are encouraged to interact with Team Italy by using the following hashtags: #wbc2017, #WBC, #Italia and #Italy.

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PRESS RELEASE: Consumer Financial Protection Bureau Oversight Uncovers and Corrects Credit Reporting Problems

CFPB logo

FOR IMMEDIATE RELEASE:
March 2, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

CONSUMER FINANCIAL PROTECTION BUREAU OVERSIGHT UNCOVERS AND CORRECTS CREDIT REPORTING PROBLEMS
Bureau Report Outlines Accuracy and Other Issues That Bureau Supervision Has Taken Action to Address

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) released a report detailing the problems in the credit reporting industry that the Bureau has uncovered and corrected through its oversight work. Since launching its supervision of the credit reporting market, the CFPB has identified significant issues with the quality of the credit information being provided by furnishers and maintained by credit reporting companies. Today’s report outlines the actions that the CFPB has taken to address these ongoing problems such as fixing data accuracy at credit reporting companies, repairing the broken dispute process, and cleaning up information being reported.

“Since we began our oversight work, the CFPB has been uncovering and correcting problems in the consumer reporting industry,” said CFPB Director Richard Cordray. “Because of our work, important improvements are being made. Much more work needs to be done but our corrective actions are leading to positive changes that are benefiting consumers all over the country.”

Consumer reporting companies are businesses that track information about a consumer, including credit history, deposit account history, and other consumer transactions. Such companies, which include what are popularly called credit bureaus or credit reporting companies or agencies, play a key role in the consumer financial services marketplace and in the financial lives of consumers. For example, the reports sold by the three largest consumer reporting companies – Equifax, Experian, and TransUnion – are used in determining everything from consumer eligibility for credit to the rates consumers pay for credit. The consumer reporting companies receive their information from furnishers, including both banks and nonbanks. Inaccurate information can lead to inaccurate reports and consumer and market harm.

Consumers continue to complain about the credit reporting industry in high numbers. The Bureau has handled approximately 185,700 credit reporting complaints as of Feb. 1, 2017. Consumers have said that when they dispute an item on their report, nothing changes even though federal law requires the consumer reporting company to conduct a reasonable reinvestigation and update the file to reflect any necessary changes or delete the item. Consumers also frequently complain of debts already paid showing up on their report as unpaid and information that is not theirs being included in their report negatively affecting their credit scores.

In 2012, the CFPB became the first federal agency to supervise all sides of the credit reporting market, which includes the consumer reporting companies and providers of consumer financial products or services, many of whom furnish or use consumer reports. In 2013, the CFPB published a bulletin warning that the agency would hold furnishers accountable for their legal obligation to investigate consumer disputes forwarded by the consumer reporting companies. The bulletin also reminded companies that they must review all relevant information provided with the disputes, including documents submitted by consumers. The CFPB has also made efforts, including in a consumer advisory, to educate the public about the importance of checking their credit reports, what to look for in their reports, and how to dispute mistakes. As outlined in today’s special edition of Supervision Highlights, because of these widespread issues, CFPB supervision has aimed its work at:

  • Fixing data accuracy at consumer reporting companies: Early on, examiners found that one or more of the consumer reporting companies lacked good quality control to check the accuracy of their consumer records. The CFPB directed them to make necessary changes, and they did. In recent exams, examiners have found that quality control programs have been instituted that include tests to identify whether reports are produced for the wrong consumer and whether reports contain mixed-up files. The companies are also taking better corrective actions when mistakes are identified, and making system improvements to prevent the same mistakes from happening again. 
  • Repairing broken dispute processes at consumer reporting companies: CFPB examiners discovered that one or more consumer reporting companies were not following federal requirements that said they must send a notice with the results of disputes to consumers. They also found one or more consumer reporting companies failing to consider documentation provided by the consumer on a disputed item. The CFPB directed these companies to improve their dispute investigation systems. Now, continued monitoring has shown that the consumer reporting companies have improved processes for investigating disputes and are improving response letters to consumers.
  • Cleaning up information from furnishers: Through earlier reviews at banks and nonbanks, CFPB examiners found widespread problems with furnishers supplying incorrect information to the consumer reporting companies. The CFPB directed them to take steps to address these problems, such as maintaining evidence that they are accurately handling disputes and conducting reasonable investigations. Since then, several furnishers have dedicated more resources to ensuring the integrity of the information. This effort includes better investigations and handling of disputes, notifying consumers of results, and taking corrective action when inaccurate information has been supplied. Importantly, though, examiners continue to find numerous violations at one or more furnishers, particularly around deposit account information.

The CFPB’s approach when examining the credit reporting activities of supervised entities is just like its approach to examining other activities of supervised entities. Supervision includes a review of compliance systems and procedures, on-site examinations, discussions with relevant personnel, and requirements to produce relevant reports. The Fair Credit Reporting Act governs how companies handle consumers’ information. When examiners find violations of law, they direct the companies to change their conduct and remediate consumers. When appropriate, the CFPB’s supervisory activity also results in enforcement actions, such as the action against the furnisher Wells Fargo Bank for failing to update or correct inaccurate, negative information reported to credit reporting companies about student loans.

Today’s edition of Supervisory Highlights Credit Reporting Special Edition is available at: http://files.consumerfinance.gov/f/documents/201703_cfpb_Supervisory-Highlights-Consumer-Reporting-Special-Edition.pdf 

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

PRESS RELEASE: Redondo Fun Factory and Carousel

redondo beach carousel

NEWS RELEASE – March 1, 2017

“NO” on “C” . . . There will Be
Fun & Games by the Sea!

In late night talks Redondo Carousel and the Redondo Fun Factory agreed
on terms to build and operate a major Family Entertainment Center at
THE WATERFRONT. This will provide Kids of all ages with a Marine Themed Carousel, the latest games & prizes mixed with nostalgia and fun for everyone.
This is the first step in keeping the historic landmark “Fun Factory” operating in a new, exciting and upgraded facility. Please, support of THE WATERFRONT.

A “NO on C” VOTE March 7th will make this a possibility.

More information available at:
www.redondocarousel.com
http://www.redondofunfactory.com
www.redondo.com/WATERFRONT