On March 8, 2016, the Consumer Financial Protection Bureau (CFPB) announced that, through its supervisory authority, it recovered $14.3 million for approximately 228,000 consumers. This recovery spans CFPB work completed in the last three months of 2015.
Using its supervisory and examination authority, the CFPB discovered violations in the money transmitter, student lending, and debt collection markets. The CFPB disclosed these findings in its latest supervisory highlights report.
Specifically, the CFPB examiners found that student loan servicers engaged in unfair practices by automatically defaulting on private student loans and demanding that the entire loan be paid at once. The CFPB finds these “auto defaults” to be unfair. The CFPB also found that student loan debt collectors used false, deceptive, or misleading representations when attempting to collect debt by threatening garnishment against borrowers not eligible for garnishment.
For other debt collectors, the CFPB determined that one failed to comply with the Fair Debt Collections Practices Act (FDCPA) by continuing to contact a consumer after the consumer notified the collector that he or she refused to pay the debtor or wanted to no longer be contacted.
Under the CFPB’s rule governing international money transfers, the CFPB fined at least one financial services company for failing to provide consumers with proper disclosures for international money transmission. The CFPB examiners likewise found illegal inaccuracies with deposit account information provided to credit reporting companies.
The CFPB may use both its supervisory authority through examinations and its enforcement authority to levy fines and take other actions against covered entities. Notably, the CFPB did not disclose the companies that were involved in these supervisory activities and that are the product of ongoing supervision or targeted exams.