CFPB Cites Compliance Violations in Report on Recent Supervisory Activities

The Consumer Financial Protection Bureau ("CFPB") cited numerous compliance violations in a published summary of recent developments in consumer reporting, debt collection, mortgage origination, remittances, student loan servicing and fair lending. In the tenth issue of Supervisory Highlights report, the CFPB highlighted developments between September and December 2015.

Consumer reporting: The CFPB report cited specific cases in which companies failed to establish and implement reasonable policies when furnishing information to consumer reporting agencies ("CRAs"). In other instances, companies failed to update information and ensure data quality.

Debt collection: The CFPB report noted the beneficial practice of using exception reports provided by CRAs to improve the accuracy of information. However, the report also cited several violations of the Fair Debt Collection Practices Act, including the failure to honor consumers' requests to cease communication as well as the use of improper representations regarding garnishment.

Mortgage origination: The report focused on compliance with the Title XIV Mortgage Reform Rule. The CFPB found that most entities were in compliance with the rule but also found exceptions, including the absence of written policies at depository institutions and deficiencies in certain compliance management systems.

Student loan servicing: The CFPB found improved payment allocation and loan modification practices at some servicers. However, the CFPB also found the existence of unfair "auto-default" clauses in certain loan agreements.

The report highlighted a number of enforcement actions in each category.