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Consumer Financial Agency Report Details Range of Violations
The National Law Journal
The Consumer Financial Protection Bureau has released its first report detailing a range of problems uncovered by agency examiners during the supervision process.
Among the violations: instances where credit limits on cards held by people under 21 were raised without obtaining permission from the older co-applicant; insufficient employee training to comply with fair credit reporting requirements; and failing to provide mortgage borrowers with clear and timely disclosures regarding the nature and costs of the real estate settlement process.
"Through our supervision process, we are bringing heightened oversight to the consumer financial markets," said CFPB Director Richard Cordray in an October 31 news release. "This report underscores our work to address practices that are risky to consumers, as well as our continued commitment to making sure that institutions are following the law."
The CFPB has the power to directly supervise entities including banks with more $10 billion in assets, "nonbanks" that provide mortgages or related services; private student lenders and payday lenders. CFPB examiners are charged with evaluating "the quality of the policies and practices that institutions have implemented to ensure that they are acting in accordance with federal consumer financial law," according to the agency.
No enforcement actions were announced in association with the problems, but there were hints they could follow. "The Bureau may also take public enforcement actions to obtain compliance with the law. Such actions have been taken against Capital One, Discover, and American Express for deceptive practices that harmed consumers," according to the agency's press release.
The CFPB also outlined its policy for appealing a less-than-satisfactory compliance rating. "Appeals will be handled by a committee that includes management at CFPB headquarters in Washington, D.C. and representatives of regional offices that were not involved in the matter under review," the agency stated.