CFPB Releases Fall 2022 Supervisory Highlights

The CFPB issued its Fall 2022 Supervisory Highlights, which identify some of the regulatory compliance issues and violations that the agency has identified during recent supervisory examinations.

Supervisory examinations are non-public and confidential, and the Supervisory Highlights are presented on a no-name basis to obscure the identities of the entities discussed in the highlights.  Nevertheless, the report informs the financial services industry about compliance violation trends that the CFPB is seeing and identifies legal areas and types of violations which are of particular interest to the CFPB.  The Supervisory Highlights also provides summaries of recently issued guidance documents and recent enforcement actions.

The newest edition covers a broad spectrum of the areas regulated by the CFPB, including:

• Mortgage Origination – The agency identified several violations related to mortgage origination, including: improperly reducing loan originator compensation in violation of the Loan Origination Compensation Rule to cover settlement cost increases that were not unforeseen; and including unenforceable provisions in loan documents whereby the consumer purportedly waived their right to initiate or participate in a class action related to their mortgage.

• Mortgage Servicing – The CFPB noted several mortgage servicing issues it had seen in recent exams, including: charging fees for consumers to make loan payments by phone where the fees were not disclosed; charging impermissible fees in connection with loans that were subject to CARES Act forbearance; misrepresenting the correct amount of payments borrowers would need to make when their loans came out of forbearance; and failing to evaluate consumers for all possible loss mitigation options and not maintain reasonable policies and procedures about the loss mitigation evaluation process.

• Fair Credit Reporting Act (FCRA) – The CFPB found that entities which furnish information to credit bureaus violated FCRA by: reporting information even though they knew it was inaccurate; not updating and correcting information which was previously reported when it changed or when the furnisher discovered it was erroneous; failing to submit information about the date when accounts first became delinquent; not establishing and implementing reasonable policies and procedures concerning the accuracy and integrity of furnished information; and, failing to conduct reasonable investigations when consumers disputed the information reported.

• Fair Debt Collection Practices Act – The agency discovered violations related to debt collection and the FDCPA which involved: continuing to engage consumers in telephone conversations after the consumers stated that the call was causing them to feel annoyed, harassed, or abused; and, improperly communicating with third parties about a consumer’s debt, where the third party had a name similar or identical to that of the consumer.