The Consumer Financial Protection Bureau (CFPB or Bureau) recently released its Spring Watch Highlights summarizing the results of the supervisory reviews it conducted between July and December 2021.
The CFPB has made various statements and numerous communications to the public, including the Supervisory Highlights document, about its mission and priorities. For example, the Bureau has commented or taken action regarding technology companies, fintechs, auto financing, consumer reporting, credit cards, debt collection, deposits, mortgage discrimination, account prepaid, small business loans and student loans. In fact, the CFPB has released a special edition of its Surveillance Highlights focusing only on issues related to COVID-19, a topic on which the Bureau has been particularly active. Unlike the previous CFPB Special Edition, the Bureau’s Spring Watch Highlights provide a comprehensive description of where the CFPB has focused its industry-wide efforts in various areas, and where members of industry can expect continued review by the Bureau in the future as well as by other related federal authorities. state agencies and attorneys general and state banking regulators.
Spring Watch highlights cover a wide range of topics, including credit cards, fair lending, consumer reporting, debt collection, small loan amounts, and student loan servicing, among many many topics. Consistent with previous communications, the highlights also identify three major elements that have been repeatedly raised by Director Rohit Chopra in his public statements, and by the Bureau in its enforcement actions and other official documents: (1) service to customers, (2) consumer disclosures, and (3) reticular compliance with regulatory requirements. According to the CFPB, these alleged programmatic shortcomings pervade the specific types of products discussed – for example, automotive servicing, consumer reporting, credit card account management, debt collection, deposits, granting mortgages, prepaid accounts, remittances and student loan servicing. The claims are supported by scathing references to practices identified in the CFPB’s recent public actions against a money transfer company, a credit reporting agency, a money transfer company and a student loan manager.
The highlights focus on customer service may be more useful for regulated entities, especially small and new entrants in the fintech and related space. While disclosures and regulatory compliance can be “integrated” into operations, albeit at a cost, customer service can be very expensive to implement and particularly difficult for new entrants to understand. Examples may include not promptly acknowledging emails and other web submissions, returning phone calls, acting on customer complaints (even if adverse), investigating customer complaints customers in a timely manner and to follow up on errors. The Bureau’s authority on unfairness gives the agency significant leverage to criticize these types of customer experience issues, as they stem from consumer frustrations about existing accounts and are therefore arguably beyond the ability consumers to avoid or control.
Further, the Highlights make it clear that the Bureau intends to continue its practice of holding what amounts to the entire “financial supply chain” accountable for deficiencies to be remedied. Whether as primary actors, secondary actors or “helpers and facilitators”, the ultimate responsibility for enforcement and associated sanctions remains the same.
Finally, the Bureau’s decision to appoint a senior public company executive in a complaint embodies the Director’s intent to hold individuals and companies accountable, a decision he made not only at the CFPB, but to his previous position as Federal Government Commissioner. Commercial committee.
It should also be noted that the Highlights document follows the CFPB’s recent release of an updated review manual for the assessment of Unfair, Deceptive and Abusive Acts and Practices (UDAAP); these updates cover discriminatory practices that may also be considered “unfair” under the DFA.
The bottom line is that affected companies carefully review the details of the highlights and remember that the Bureau’s oversight authority, which it recently announced plans to expand, is a powerful tool for quickly addressing priority issues and what the agency considers to be recurring violations. Although it may seem aggressive, the Spring Supervisory Highlights is also a useful roadmap for what to expect from the CFPB in the short to medium term.