Tag Archives: consumer

2022 HMDA Data on Mortgage Lending Now Available

FOR IMMEDIATE RELEASE:
March 20, 2023

CONTACT:
Office of Public Affairs
press@cfpb.gov

2022 HMDA Data on Mortgage Lending Now Available

WASHINGTON, D.C. — The Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data for 2022 are now available on the Federal Financial Institutions Examination Council’s (FFIEC) HMDA Platform for approximately 4,394 HMDA filers. The published data contain loan-level information filed by financial institutions and modified to protect consumer privacy.

To increase public accessibility, the annual loan-level LAR data for each HMDA filer are now available online. Previously, users could obtain LAR data only by making requests to specific institutions for their annual data. To allow for easier public access to all LAR data, the Consumer Financial Protection Bureau’s (CFPB) 2015 HMDA rule made the data for each HMDA filer available electronically on the FFIEC’s HMDA Platform. This year, in addition to institution-specific modified LAR files, users can download one combined file that contains all institutions’ modified LAR data.

Later this year, the 2022 HMDA data will be available in other forms to provide users insights into the data. These forms will include a nationwide loan-level dataset with all publicly available data for all HMDA reporters; aggregate and disclosure reports with summary information by geography and lender; and access to the 2022 data through the HMDA Data Browser to allow users to create custom datasets, reports, and data maps. The CFPB will later also publish a Data Point article highlighting key trends in the annual data.

HMDA users may find the CFPB’s Beginner’s Guide to Accessing and Using HMDA Data useful for background on HMDA and tech tips for understanding and analyzing the data.

The 2022 HMDA Loan Application Register data can be found on the FFIEC’s HMDA platform: https://ffiec.cfpb.gov/data-publication/modified-lar.

###

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.

consumer

AGENCIES ANNOUNCE DOLLAR THRESHOLDS IN REGULATIONS Z AND M FOR EXEMPT CONSUMER CREDIT AND LEASE TRANSACTIONS

FOR IMMEDIATE RELEASE:
October 31, 2019

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

AGENCIES ANNOUNCE DOLLAR THRESHOLDS IN REGULATIONS Z AND M FOR EXEMPT CONSUMER CREDIT AND LEASE TRANSACTIONS

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) and Federal Reserve Board today announced the dollar thresholds in Regulation Z (Truth in Lending) and Regulation M (Consumer Leasing) that will apply for determining exempt consumer credit and lease transactions in 2020. These thresholds are set pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amendments to the Truth in Lending Act and the Consumer Leasing Act that require adjusting these thresholds annually based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the Federal Reserve Board and the Bureau will not adjust this exemption threshold from the prior year. However, in years following a year in which the exemption threshold was not adjusted, the threshold is calculated by applying the annual percentage change in CPI-W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI-W had been taken into account. Transactions at or below the thresholds are subject to the protections of the regulations.

Based on the annual percentage increase in the CPI-W as of June 1, 2019, the protections of the Truth in Lending Act and the Consumer Leasing Act generally will apply to consumer credit transactions and consumer leases of $58,300 or less in 2020. However, private education loans and loans secured by real property (such as mortgages) are subject to the Truth in Lending Act regardless of the amount of the loan.

Although the Dodd-Frank Act generally transferred rulemaking authority under the Truth in Lending Act and the Consumer Leasing Act to the Bureau, the Federal Reserve Board retains authority to issue rules for certain motor vehicle dealers. Therefore, the agencies are issuing these notices jointly.

The Regulation M notice is available in the Federal Register here: https://www.federalregister.gov/documents/2019/10/30/2019-21554/consumer-leasing-regulation-m.

The Regulation Z notice is available in the Federal Register here: https://www.federalregister.gov/documents/2019/10/30/2019-21557/truth-in-lending-regulation-z.

###

Media Contacts:

Federal Reserve Susan Stawick (202) 452-2955

CFPB Marisol Garibay (202) 435-5169

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

BUREAU OF CONSUMER FINANCIAL PROTECTION SETTLES WITH TRITON MANAGEMENT GROUP

Media contact:
Office of Communications
Tel: (202) 435-7170

BUREAU OF CONSUMER FINANCIAL PROTECTION SETTLES WITH TRITON MANAGEMENT GROUP

Triton Did Not Properly Disclose Terms and Conditions of Certain Loan Products, and Failed to Disclose Finance Charges in Advertisements

WASHINGTON, D.C. — The Bureau of Consumer Financial Protection (Bureau) today announced a settlement with Triton Management Group, Inc., a small-dollar lender that operates in Alabama, Mississippi, and South Carolina under several names including “Always Money” and “Quik Pawn Shop.”

As described in the consent order, the Bureau found that Triton violated the Dodd-Frank Wall Street Reform and Consumer Protection Act and the disclosure requirements of the Truth in Lending Act by failing to properly disclose finance charges associated with their auto title loans in Mississippi. The Bureau also found that Triton used advertisements that failed to disclose the annual percentage rate and other information required by the Truth in Lending Act.

Under the terms of the consent order, Triton and its subsidiaries are barred from misrepresenting the costs and other terms of their loans and must return unlawful fees paid by consumers. The order enters a judgment of $1,522,298 against Triton, which represents the undisclosed finance charges consumers paid on their Triton loans. As explained in the order, full payment of this amount is suspended subject to Triton’s paying $500,000 to affected consumers.

The consent order filed today is available at: https://files.consumerfinance.gov/f/documents/bcfp_triton-management-group_consent-order_2018-07.pdf

 

STATEMENT OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION ON ENACTMENT OF S.J. RES. 57

FOR IMMEDIATE RELEASE:
May 21, 2018

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

STATEMENT OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION ON ENACTMENT OF S.J. RES. 57

Today the President signed into law a bipartisan Congressional resolution disapproving a rule that was in the form of guidance issued by the Bureau of Consumer Financial Protection (Bureau) about indirect auto lender compliance with the Equal Credit Opportunity Act (ECOA) and its implementing regulation.

Acting Director Mick Mulvaney stated:

“I thank the President and the Congress for reaffirming that the Bureau lacks the power to act outside of federal statutes. As an executive agency, we are bound to enforce the law as written, not as we may wish it to be. In this case, the initiative that the previous leadership at the Bureau pursued seemed like a solution in search of a problem. Those actions were misguided, and the Congress has corrected them.

I want to make it abundantly clear that the Bureau will continue to fight unlawful discrimination at every turn. We will vigorously enforce fair lending laws in our jurisdiction, and will stand on guard against disparate treatment of borrowers.

I am heartened that the people, through their elected representatives, have corrected this instance of Bureau overreach. I look forward to working with the Congress to bring much-needed structural accountability to the Bureau so that our cherished democratic principles are supported and the rights of every American consumer are always protected.”

The enactment of this Congressional Review Act (CRA) resolution does more than just undo the Bureau’s guidance on indirect auto lending. It also prohibits the Bureau from ever reissuing a substantially similar rule unless specifically authorized to do so by law.

Given a recent Supreme Court decision distinguishing between antidiscrimination statutes that refer to the consequences of actions and those that refer only to the intent of the actor, and in light of the fact that the Bureau is required by statute to enforce federal consumer financial laws consistently, the Bureau will be reexamining the requirements of the ECOA.

Today’s action also clarifies that a number of Bureau guidance documents may be considered rules for purposes of the CRA, and therefore the Bureau must submit them for review by Congress. The Bureau welcomes such review, and will confer with Congressional staff and federal agency partners to identify appropriate documents for submission.

consumer

BUREAU OF CONSUMER FINANCIAL PROTECTION ACTING DIRECTOR ANNOUNCES CHIEF COMMUNICATIONS OFFICER AND SPOKESPERSON

For immediate release:

April 30, 2018

Media contact:

Office of Communications
Tel: (202) 435-7170

BUREAU OF CONSUMER FINANCIAL PROTECTION ACTING DIRECTOR ANNOUNCES CHIEF COMMUNICATIONS OFFICER AND SPOKESPERSON 

WASHINGTON, D.C. — As of Monday, April 30, 2018, John Czwartacki has transitioned from the Office of Management and Budget (OMB) to the Bureau of Consumer Financial Protection (BCFP) as its Chief Communications Officer and Spokesperson. His 30 years of experience in public and private sectors will now be applied full time at the Bureau as it fulfills its statutory mission.

Czwartacki (CZ), who has been at OMB from the earliest days of the administration, was detailed as a Senior Advisor at BCFP by Acting Director Mulvaney upon his appointment to the dual roles last November. With the transition of CZ to BCFP, he joins an already successful team in their mission to prepare for the yet-unnamed permanent director and create a more effective, efficient, and accountable actor within the federal government and on behalf of the American people.

“It has been nothing short of the highlight of my career serving the current budget director, his patriotic and tireless staff, and the Trump administration overall.” Czwartacki added, “It has been my pleasure to work alongside an extremely talented communications team both at OMB and in the West Wing.”

“I look forward to continuing my service, alongside Mick Mulvaney and his tremendous staff, for the foreseeable future. We have lots of work ahead of us.”

BUREAU OF CONSUMER FINANCIAL PROTECTION FINALIZES AMENDMENT TO “KNOW BEFORE YOU OWE” MORTGAGE DISCLOSURE RULE

For immediate release:

April 26, 2018

Media contact:

Office of Communications
Tel: (202) 435-7170

 

BUREAU OF CONSUMER FINANCIAL PROTECTION FINALIZES AMENDMENT TO “KNOW BEFORE YOU OWE” MORTGAGE DISCLOSURE RULE

Update Will Provide More Clarity Regarding Closing Cost Increases 

WASHINGTON, D.C. — Today the Bureau of Consumer Financial Protection (Bureau) finalized an amendment to its “Know Before You Owe” mortgage disclosure rule that addresses when mortgage lenders with a valid justification may pass on increased closing costs to consumers and disclose them on a Closing Disclosure. The update is intended to provide greater clarity and certainty to the mortgage industry.

The Know Before You Owe mortgage disclosure rule took effect Oct. 3, 2015. The Bureau’s rule created new Loan Estimate and Closing Disclosure forms that consumers receive when applying for and closing on a mortgage loan. The Bureau heard feedback from the industry that they needed clarification on when creditors may pass on increased costs to consumers and disclose them on a Closing Disclosure. Specifically, a timing restriction on when the creditor may use a Closing Disclosure to communicate closing cost increases to the consumer could prevent a creditor from charging the consumer for those cost increases despite a valid reason for doing so, such as a changed circumstance or borrower request. In response, in July 2017 the Bureau proposed an amendment removing that particular timing restriction. Today, after considering public comment on the proposal, the Bureau is finalizing that amendment.

The final rule will take effect 30 days after publication in the Federal Register.

The final rule is available at: https://files.consumerfinance.gov/f/documents/cfpb_tila-respa_final-rule_amendments-to-federal-mortgage-disclosure-requirements.pdf

consumer financial protection bureau

Company Banned From Offering Credit Repair Services

FOR IMMEDIATE RELEASE:
August 30, 2017

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

CONSUMER FINANCIAL PROTECTION BUREAU TAKES ACTION TO SHUT DOWN CREDIT REPAIR COMPANY FOR CHARGING ILLEGAL FEES AND MISLEADING CONSUMERS

Company Banned From Offering Credit Repair Services and Required to Pay $150,000 Penalty

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) today filed a proposed final judgment in federal court that would resolve a lawsuit against Prime Marketing Holdings, LLC for illegal credit repair practices. The lawsuit alleged that the company charged illegal advance fees and misled consumers about the cost and effectiveness of its services and the nature of its money-back guarantee. The proposed order would permanently ban the company from doing business within the credit repair industry and require a $150,000 civil money penalty.

“Today we are taking action to shut down a company that deceived consumers into paying for credit repair services that did not live up to the company’s promises,” said CFPB Director Richard Cordray. “We remain committed to taking action against companies that mislead consumers into paying illegal fees with false promises.”

Prime Marketing Holdings is a credit repair company incorporated in Delaware with an office in Van Nuys, Calif. Prime Marketing Holdings has operated under various names including Park View Credit, National Credit Advisors, and Credit Experts. Between Oct. 1, 2014 and at least June 30, 2017, the company charged over 50,000 consumers more than $20 million for credit repair services.

In its lawsuit filed in September 2016, the Bureau alleged that Prime Marketing Holdings made misleading and unsubstantiated statements about its ability to improve consumers’ credit scores by removing negative information from their credit reports. The company also misrepresented and failed to disclose the limitations of its money-back guarantee. The Bureau alleges that these practices violated the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Telemarketing Sales Rule. Specifically, the CFPB alleged that the defendant:

  • Charged illegal advance fees: Federal law bars telemarketers and certain companies from requesting or collecting fees for credit repair services until certain conditions are met around the delivery of services. Prime Marketing Holdings, however, charged a variety of fees for its services before demonstrating that the promised results had been achieved as required by law. Specifically, the company charged consumers initial fees that it, at times, claimed were required to obtain special credit reports for consumers. The company also charged set-up fees totaling hundreds of dollars and monthly fees that often equaled $89.99 per month.
  • Misled consumers about the benefits of its credit repair services: Prime Marketing Holdings misrepresented its ability to remove negative entries on consumers’ credit reports. The company also misrepresented to customers that its credit repair services would, or likely would, result in a substantial increase to consumers’ credit scores, generally by an average of 100 points. The company lacked a reasonable basis for making these claims.
  • Misrepresented the costs of its services: In some cases, Prime Marketing Holdings failed to disclose to consumers during sales calls that they would be charged a monthly fee.
  • Failed to disclose limits on “money-back guarantee”: Prime Marketing Holdings misrepresented that it offered a money-back guarantee if consumers were unhappy with the results of the company’s services. The company also failed to clearly and conspicuously disclose that the guarantee had significant limitations, including that the consumer had to pay for at least six months of services to be eligible for the guarantee.

The proposed final judgment has been filed with the U.S. District Court for the Central District of California, and is only effective if approved by the presiding judge.

On June 27, 2017, the Bureau filed two related complaints against Commercial Credit Consultants, Prime Credit, IMC Capital, Blake Johnson, Eric Schlegel, Park View Law and Arthur Barens. Park View Law and Arthur Barens partnered with Prime Marketing Holdings from September 2014 to June 2015. Those two complaints alleged unlawful conduct very similar to the conduct alleged here. On the same day, the Bureau and those defendants filed proposed settlements to resolve those suits. Those settlements have both been approved.

A copy of the proposed final judgment filed in federal district court against Prime Marketing Holdings is available at: http://files.consumerfinance.gov/f/documents/201708_cfpb_prime-market-holdings_stipulated-final-judgment-and-order.pdf

A copy of the second amended complaint filed in district court against Prime Marketing Holdings is available at: http://files.consumerfinance.gov/f/documents/201708_cfpb_prime-market-holdings_complaint.pdf

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: CONSUMER FINANCIAL PROTECTION BUREAU REPORT FINDS THAT 9 IN 10 OF THE HIGHEST-RISK STUDENT LOAN BORROWERS WERE NOT ENROLLED IN AFFORDABLE REPAYMENT PLANS

consumer financial protection bureau

FOR IMMEDIATE RELEASE:
May 16, 2017

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

CONSUMER FINANCIAL PROTECTION BUREAU REPORT FINDS THAT 9 IN 10 OF THE HIGHEST-RISK STUDENT LOAN BORROWERS WERE NOT ENROLLED IN AFFORDABLE REPAYMENT PLANS
Nearly Half of the Highest-Risk Borrowers Not Enrolled in an Affordable Repayment Plan Redefault

Washington, D.C. – Today, the Consumer Financial Protection Bureau released an analysis of a student loan industry data sample showing that 9 in 10 of the highest-risk borrowers were not enrolled in federal affordable repayment plans. The analysis looks at hundreds of thousands of the highest-risk borrowers who are exiting default and may be eligible for federal programs that allow them to pay based on how much money they make. Student loan companies are responsible for informing borrowers about affordable repayment options that can help them stay on track. The Bureau also found that nearly half of the highest-risk borrowers not enrolled in an affordable repayment plan redefault, compared to less than 10 percent of those who are enrolled.

“Too many struggling borrowers fall through the cracks in a broken, outdated student loan system,” said CFPB Director Richard Cordray. “These people did everything that was asked of them to get back on their feet, only to end up deeper in debt. We will continue to work to make sure this industry provides borrowers with the kind of service they deserve.”

“For far too many student loan borrowers, the dream of a fresh start turns into a nightmare of default and deeper debt,” said CFPB Student Loan Ombudsman Seth Frotman. “When student loan companies know that nearly half of their highest-risk customers will quickly fail, it’s time to fix the broken system that makes this possible.”

The CFPB’s new report is available at: http://files.consumerfinance.gov/f/documents/201705_cfpb_Update-from-Student-Loan-Ombudsman-on-Redefaults.pdf

The student loan market has grown rapidly in the last decade with about 44 million Americans now owing money. The combined total for outstanding federal and private student loan debt now exceeds $1.4 trillion, with the vast majority from federal loans. The Department of Education estimates that more than 8 million federal student loan borrowers have gone at least 12 months without making a required monthly payment and have fallen into default. Nearly 1.2 million borrowers defaulted in the past year. These borrowers face negative consequences such as wage garnishment, loss of federal benefits, and negative credit history.

Federal student loan borrowers have access to programs that are intended to provide a fresh start through two primary options. Under the first option, borrowers can work with a debt collector to “rehabilitate” their defaulted debt — a process where borrowers have to make nine on-time payments over 10 months to exit default. Generally, the federal government pays debt collectors to take these payments and then transfers  borrowers back to a servicer or to the government for assignment to a servicer. Servicers then can help these borrowers enroll in an affordable repayment plan. Under the second option, borrowers can refinance the defaulted debt by consolidating it into a new federal Direct Consolidation loan, which immediately moves them into an affordable repayment plan. Most debt collectors use rehabilitation to get borrowers out of default, which constitutes more than 70 percent of all federal loan collections.

Last year, the Bureau sent student loan servicers a voluntary information request seeking new information on how previously defaulted borrowers perform over time. Servicers collectively handling accounts for more than 20 million student loan borrowers provided information in response to the Bureau’s request. This included data about borrower performance for more than 600,000 of the highest-risk student loan borrowers. The highest-risk borrowers are those who previously defaulted on a federal student loan, exited default, and were then transferred to a student loan servicer. Today’s report provides the public with a preliminary update on this information, including data related to the performance of certain previously defaulted student loan borrowers. Key results for borrowers in the Bureau’s sample include:

  • 9 out of 10 of the highest-risk borrowers were not enrolled in an affordable repayment plan after rehabilitation: The majority of highest-risk borrowers are put into the rehabilitation program, which means that they must pay a debt collector for nine out of ten months in order to get out of default. Once out of default, these borrowers must work with a student loan servicer to secure an affordable repayment plan. The range of widely available income-driven repayment plans that allow borrowers to pay based on income should ensure that payments remain affordable over time. However, new data shows that fewer than 2 percent of borrowers accessed this protection immediately after paying a debt collector to get out of default.  Nearly a year later, 9 in 10 of these borrowers still had not secured an affordable repayment plan from their student loan servicer.
  • Nearly half of the highest-risk borrowers redefault if not enrolled in an affordable repayment plan: Growing evidence shows income-driven repayments are a key step to avoid default for many of the highest-risk student loan borrowers. Data provided in the report shows that nearly half of all borrowers who were not enrolled in an income-driven plan ended up back in default within three years. In contrast, less than 1 in 10 borrowers in income-driven repayment plans ended up back in default over this period.
  • 95 percent of the highest-risk borrowers do not redefault within the first year when they consolidate into an affordable repayment plan: A minority of the highest-risk borrowers consolidate their defaulted loans to get out of default, a process that will automatically establish payment plans based on their income. Nearly 95 percent of borrowers who recently consolidated their defaulted loans remained on track 12 months later. After two years, these borrowers defaulted at a rate one-third lower than the rate for those who rehabilitated their loans but did not consolidate.

This data offers new evidence that borrowers, taxpayers, and student loan companies would benefit from a clearer, more streamlined process to help previously defaulted borrowers succeed over the long term, and to ensure borrowers avoid default in the first place. Last year, the Bureau warned that hundreds of thousands of struggling student loan borrowers may end up back in default over the next two years, racking up at least $125 million in unnecessary interest charges along the way.

The Bureau has called for an overhaul of these programs to place greater emphasis on the long-term success of economically vulnerable student loan borrowers. This information will help the Bureau assess how current practices intended to assist the highest-risk borrowers may differ among companies. The Bureau previously highlighted how inconsistent practices across servicers can cause significant problems for borrowers, calling for industrywide servicing standards in this market.

The CFPB provides a Repay Student Debt tool, which helps borrowers get unbiased tips on how to navigate student loan repayment, along with other sample letters they can send to their student loan servicers. More information is available at: consumerfinance.gov/students.

PRESS RELEASE: CONSUMER FINANCIAL PROTECTION BUREAU MONTHLY SNAPSHOT SPOTLIGHTS STUDENT LOAN COMPLAINTS

consumer financial protection bureau

FOR IMMEDIATE RELEASE:
April 25, 2017

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

CONSUMER FINANCIAL PROTECTION BUREAU MONTHLY SNAPSHOT SPOTLIGHTS STUDENT LOAN COMPLAINTS
Report Also Looks at Consumer Complaints from Nevada

WASHINGTON, D.C. – Today the Consumer Financial Protection Bureau (CFPB) released a monthly complaint snapshot highlighting consumer complaints about student loans. The snapshot shows that both private and federal student loan borrowers nationwide report persistent servicing breakdowns that may sideline their path to repayment. This month’s report also highlights trends seen in complaints coming from Nevada. As of April 1, 2017, the Bureau had handled approximately 1,163,200 consumer complaints across all products.

“Student loan servicers play an important role in helping millions of people manage the loans they take out to pursue an education,” said CFPB Director Richard Cordray. “Unfortunately, borrowers continue to report difficulties and setbacks as they try to work with their servicers to manage their loan debt.”

The Monthly Complaint Report can be found at: http://files.consumerfinance.gov/f/documents/201704_cfpb_Monthly-Complaint-Report.pdf

Category Spotlight: Student Loans
At $1.4 trillion, student loan debt represents the U.S.’s second largest debt market behind mortgages. More than 44 million student loan borrowers rely on the companies servicing their loans to manage all aspects of repayment, including providing borrowers with available repayment options when they are struggling to repay their loans. In September 2015, the Bureau released a report outlining widespread servicing failures and sloppy, patchwork practices reported by both federal and private student loan borrowers. As of April 1, 2017, the Bureau had handled approximately 44,400 student loan complaints from consumers. Some of the findings in the snapshot include:

  • Consumers complain about poor information from and sloppy practices by servicers: Of all the complaints the Bureau receives about student loans, over half—64 percent—are about problems consumers experience when dealing with their student loan servicer. Consumers who reach out to their servicer complain they are not informed about options that would allow them to continue repaying their loan, such as income-driven repayment plans. Rather, consumers complain that their servicer directs them into plans that suspend repayment and cause the interest on their loans to pile up. Consumers also complain that their monthly student loan payments are misapplied by the servicer, which the Bureau believes can cause a range of problems including negative credit reporting and loss of certain loan benefits, such as cosigner release for private student loans.
  • Consumers complain about difficulty enrolling and staying in an income-driven repayment plan: Consumers complain about processing delays and inaccurate denials when submitting an income-driven repayment plan application to their servicer. These complaints include documents being lost by the servicer, application processing times spanning several months, missed payment towards loan forgiveness, and unclear guidance when enrolling into a new income-driven repayment plan. Additionally, consumers complain of receiving insufficient information from their servicers to meet recertification deadlines for their income-driven repayment plan.
  • Consumers report confusion about their progress toward Public Service Loan Forgiveness programs: Consumers express concerns about their standing in Public Service Loan Forgiveness and other loan forgiveness programs. These borrowers complain that after years of making payments, they learn that their loans are not enrolled in a qualifying repayment plan, despite borrowers telling their servicers that they were pursuing Public Service Loan Forgiveness. Other borrowers complain that their servicer did not explain that consolidating their loans would wipe out all previous progress made towards loan forgiveness.
  • Companies with the most student loan-related complaints: The three companies that the Bureau has received the most average monthly student loan complaints about are Navient Solutions, LLC, Fedloan Servicing/AES, and Nelnet.

The Bureau has also reported on consumer complaints to highlight the unique challenges that certain populations of consumers with student loan debt face, including older Americans, servicemembers, veterans with disabilities, and previously defaulted borrowers.

National Complaint Overview
As of April 1, 2017, the CFPB had handled approximately 1,163,200 complaints nationally. Some of the findings from the statistics being published in this month’s snapshot report include:

  • Complaint volume: For March 2017, debt collection was the most-complained-about financial product or service. Of the approximately 28,000 complaints handled in March, there were 8,711 complaints about debt collection. The second most-complained-about consumer product was credit reporting, which accounted for 5,498 complaints. Mortgages were third most-complained-about financial product or service, accounting for 3,965 complaints. 
  • Product trends: In a year-to-year comparison examining the three-month time period of January to March, student loan complaints showed the greatest increase—325 percent—of any product or service. The Bureau received 773 student loan complaints between January and March 2016, while it received 3,284 complaints during the same time period in 2017. Part of this year-to-year increase can be attributed to the CFPB updating its student loan complaint form to accept complaints about federal student loan servicing, starting in late February 2016. The Bureau also initiated an enforcement action against a large student loan servicer during the time period covered by this report. 
  • State information: Montana, Georgia, and Wyoming experienced the greatest year-to-year complaint volume increases from January to March 2017, versus the same time period 12 months before; with Montana up 54 percent, Georgia up 46 percent, and Wyoming up 45 percent. 
  • Most-complained-about companies: The top three companies that received the most complaints from November 2016 through January 2017 were Navient Solutions, LLC, Equifax, and Experian.

Geographic Spotlight: Nevada
This month, the CFPB highlighted complaints from Nevada and the Las Vegas metro area.  As of April 1, 2017, consumers in Nevada have submitted 14,600 of the 1,163,200 complaints the CFPB has handled. Of those complaints, 10,800 came from consumers in the Las Vegas metro area. Findings from the Nevada complaints include:

  • Rate of debt collection complaints similar to the national average: Complaints related to debt collection accounted for 29 percent of all complaints submitted by consumers from Nevada. This is slightly higher than the rate of 27 percent at which consumers nationally submit debt collection complaints to the Bureau.
  • Rate of mortgage complaints mirrors the national average: Complaints related to mortgages accounted for 23 percent of all complaints submitted by consumers from Nevada, which is identical to the national rate of mortgage complaints submitted.
  • Most-complained-about companies: Wells Fargo, Experian, and Equifax were the most-complained-about companies from consumers in Nevada.

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB, established consumer complaint handling as an integral part of the CFPB’s work. The CFPB began accepting complaints as soon as it opened its doors in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans.

In June 2012, the CFPB launched its Consumer Complaint Database, which is the nation’s largest public collection of consumer financial complaints. When consumers submit a complaint they have the option to share publicly their explanation of what happened. For more individual-level complaint data and to read consumers’ experiences, visit the Consumer Complaint Database at: www.consumerfinance.gov/complaintdatabase/.

Company-level complaint data in the report uses a three-month rolling average of complaints sent by the Bureau to companies for response. This data lags other complaint data in this report by two months to reflect the 60 days companies have to respond to complaints, confirming a commercial relationship with the consumer. Company-level information should be considered in the context of company size.

To submit a complaint, consumers can:

  • Go online at www.consumerfinance.gov/complaint/
  • Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)
  • Fax the CFPB at 1-855-237-2392
  • Mail a letter to: Consumer Financial Protection Bureau, P.O. Box 4503, Iowa City, Iowa 52244
  • Additionally, through “Ask CFPB,” consumers can get clear, unbiased answers to their questions at consumerfinance.gov/askcfpb or by calling 1-855-411-CFPB (2372).

###

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.

CONSUMER FINANCIAL PROTECTION BUREAU SUES FOUR ONLINE LENDERS FOR COLLECTING ON DEBTS CONSUMERS DID NOT LEGALLY OWE

consumer financial protection bureau

FOR IMMEDIATE RELEASE:
April 27, 2017

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

CONSUMER FINANCIAL PROTECTION BUREAU SUES FOUR ONLINE LENDERS FOR COLLECTING ON DEBTS CONSUMERS DID NOT LEGALLY OWE
Bureau Alleges Companies Deceived Consumers About Debt That Was Not Legally Owed

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) today 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. In a suit filed in federal court, the CFPB 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. The CFPB alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. The CFPB seeks to stop the unlawful practices, recoup relief for harmed consumers, and impose a penalty.

“We are suing four online lenders for collecting on debts that consumers did not legally owe,” said CFPB Director Richard Cordray. “We allege that these companies made deceptive demands and illegally took money from people’s bank accounts. We are seeking to stop these violations and get relief for consumers.”

Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. are online installment loan companies in Upper Lake, California. Since at least 2012, Golden Valley Lending and Silver Cloud Financial have offered online loans of between $300 and $1,200 with annual interest rates ranging from 440 percent up to 950 percent. Mountain Summit Financial and Majestic Lake Financial began offering similar loans more recently.

The Bureau’s investigation showed that the high-cost loans violated licensing requirements or interest-rate caps – or both – that made the loans void in whole or in part in at least 17 states: Arizona, Arkansas, Colorado, Connecticut, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, and South Dakota. The Bureau alleges that the four lenders are collecting money that consumers do not legally owe. The CFPB’s suit alleges that Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The specific allegations include:

  • Deceiving consumers about loan payments that were not owed: The lenders pursued consumers for payments even though the loans in question were void in whole or in part under state law and payments could not be collected. The interest rates the lenders charged were high enough to violate usury laws in some states where they did business, and violation of these usury laws renders particular loans void. In addition, the lenders did not obtain licenses to lend or collect in certain states, and the failure to obtain those licenses renders particular loans void. The four lenders created the false impression that they had a legal right to collect payments and that consumers had a legal obligation to pay off the loans.
  • Collecting loan payments which consumers did not owe: The four lenders made electronic withdrawals from consumers’ bank accounts or called or sent letters to consumers demanding payment for debts that consumers were under no legal obligation to pay.
  • Failing to disclose the real cost of credit: The lenders’ websites did not disclose the annual percentage rates that apply to the loans. When contacted by prospective borrowers, the lenders’ representatives also did not tell consumers the annual percentage rate that would apply to the loans.

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 like the Truth in Lending Act. The CFPB is seeking monetary relief for consumers, civil money penalties, and injunctive relief, including a prohibition on collecting on void loans, against Golden Valley and the other lenders. The Bureau’s complaint is not a finding or ruling that the defendant have actually violated the law.

A copy of the complaint filed in federal district court is available at: http://files.consumerfinance.gov/f/documents/201704_cfpb_Golden-Valley_Silver-Cloud_Majestic-Lake_complaint.pdf

###

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.