The CFPB takes pride in publishing the results of enforcement actions, and its website features reports of recent settlements and penalties.  The common theme in these reports is big dollar figures, demonstrating just how expensive it can be to deal with the CFPB.

The lesson to be learned from this is to stay out of trouble.  It seems simple enough, but the key to avoiding CFPB liability is to avoid violating consumer financial protection laws. This means creating a “culture of compliance.”  The first step to doing this is implementing a successful and comprehensive Compliance Management System.  But, even companies with the best compliance programs may have breakdowns from time to time.  In those instances, it is especially important to show the CFPB that the company has promoted the “culture of compliance,” because it could be an important factor in mitigating the potential damages and penalties.

Below we have summarized four notable enforcement actions that the CFPB has published over the last few months.

First Financial Services Group, Inc. (August 2014)   –   In a consent order, First Financial Services Group, Inc., an automobile finance company, agreed to pay $2,750,000 for failing to have a Furnisher Policy as required by the Fair Credit Reporting Act and knowingly furnishing inaccurate information to consumer reporting agencies.

Amerisave Mortgage Corporation (August 2014)   –   The CFPB ordered Georgia-based Amerisave Mortgage Corporation and Novo Appraisal Management Company to pay $19,300,000.  Additionally, the CFPB ordered the companies’ owner, individually, to pay $1,500,000.  The order resulted from a bait-and-switch mortgage lending scheme and misleading advertising.

ACE Cash Express (July 2014)   –   ACE Cash Express, one of the largest payday lender companies in the country, will pay $10,000,000 for “pushing payday borrowers into a cycle of debt” by using illegal debt collection tactics that amounted to unfair, deceptive and abusive acts or practices.  Specifically, the CFPB emphasized that ACE threatened to sue or criminally prosecute without intention of doing so and made excessive and improper collection calls.

RealtySouth (May 2014)   –   The CFPB ordered RealtySouth, Alabama’s largest real estate firm, to pay$500,000 for RESPA disclosure violations.  RealtySouth directed or suggested that title and closing services be conducted by TitleSouth, an affiliate, without giving an Affiliated Business Arrangement disclosure.