A 2021 supervisory highlights report from the Consumer Financial Protection Bureau covering the first half of the year highlighted mortgage servicing, fair lending, payday loan and remittance violations.
Due to pandemic impacts, the CFPB prioritized mortgage servicing supervision as more borrowers applied for and received mortgage forbearance. While the CARES Act prohibits mortgage servicers from imposing fees on consumers receiving CARES Act forbearance, CFPB examiners found that mortgage servicers still charged borrowers late fees and default-related fees. Some of these illegal late fees weren’t refunded until a year later, the bureau said.
The CFPB’s examination team found that some mortgage lenders violated the Equal Credit Opportunity Act, discriminating against African American and female borrowers in the granting of pricing exceptions. Lenders lacked oversight and control over how mortgage loan officers granted pricing exceptions to customers, and they improperly considered small business applicants’ religion in their credit decisions, the agency said.
Some payday lenders improperly debited or attempted to debit consumers’ bank accounts, according to the report. In some instances where consumers called to authorize a debit payment, lenders’ systems erroneously indicated the transactions did not process, resulting in the improper debiting of additional, identical amounts or unauthorized attempts.
Recently, the CFPB said it would increase its focus on overdraft and non-sufficient fund fees by enhancing supervisory and enforcement scrutiny on financial institutions “that are heavily dependent on overdraft fees.”
Examiners also found some consumers were deprived of their rights by remittance providers who received notices of errors alleging that remitted funds had not been made available to designated recipients by disclosed dates of availability, the bureau said. Providers then failed to investigate fees that should have been refunded as part of the error resolution process.
“Today’s report reveals that irresponsible or mismanaged firms harmed Americans during the COVID-19 pandemic,” said CFPB Director Rohit Chopra. “We will continue to supervise firms to halt harmful practices before they become widespread.”
The report, which covered examinations completed between January 2021 and June 2021, also covered credit card account management, debt collection, deposits and prepaid accounts.