Enforcement actions drop off in second quarter

Enforcement actions fell to six in the second quarter at the Consumer Financial Protection Bureau, down from 17 in the first quarter of the year.

Enforcement actions fell to six in the second quarter at the Consumer Financial Protection Bureau. That’s down from 17 in the first quarter of 2017, according to Bloomberg Law’s CFPB Enforcement Tracker and CFPB Enforcement Analytics.

The first three months of the year were the second-busiest quarter in CFPB history, according to a Bloomberg Law report. But the second quarter saw fewer CFPB actions than any quarter in 2015 or 2016, and none of them were against banks.

The agency has brought 188 enforcement actions since it began the activity in 2012. Of those, 37 of them – 20 percent – have been against banks in that time. Of the 23 filed in the first half of 2017, only one has been against a bank: TCF National Bank, Wayzata, Minn., was fined over its overdraft enrollment practices in January.

The third quarter of 2015 had the largest amount of enforcement actions at 20, with the first quarts of 2017 and 2015 next, at 17 and 16 respectively.

The spike in enforcement actions at the beginning of the year initially led some to believe that 2017 would be one of the bureau’s busiest years, but the pace – and size – of the actions has dropped off significantly.

“Many of those are nuisance settlements,” Ronald L. Rubin, a former CFPB enforcement attorney and now a writer whose pieces focus on the bureau, told Bloomberg BNA. “When you see a settlement in the neighborhood of $1 million, you should remember that the defendant would have paid his lawyers that much to fight and win.”

Companies are now also starting to fight back. Loan servicer Ocwen Financial Corp., challenged the CFPB’s constitutionality after the bureau filed a lawsuit against Ocwen in April which alleged the company illegally foreclosed on consumers, among other allegations. After it was fined over kickbacks in 2015, New Jersey mortgage company PHH also challenged the bureau’s constitutionality. A Federal Court appeals panel upheld that challenge in October.

Fredrikson & Byron Law