CFPB Orders Bank of America to Pay $10 Million Penalty for Illegal Garnishments

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) finalized an enforcement action against Bank of America for processing illegal, out-of-state garnishment orders against its customers’ bank accounts. Bank of America unlawfully froze customer accounts, charged garnishment fees, garnished funds, and sent payments to creditors based on out-of-state garnishment court orders that should have been processed under the laws and protections of the states where the consumers lived. Bank of America also violated the law by inserting unfair and unenforceable language into customer contracts that purported to limit customers’ rights to challenge garnishments.

CFPB and Fintech Companies: Charting a New Course on Regulatory Supervision

As a fintech company, platform offering payment services, or a cryptocurrency business, you may be used to operating in uncharted waters; the Consumer Financial Protection Bureau (CFPB), however, is ready to start drawing some maps. It has announced that it will begin to exercise its supervisory authority over non-bank consumer financial entities that the CFPB has reason to believe pose risks to consumers.

U.S. Court of Appeals for the Third Circuit Agrees to Hear Interlocutory Appeal in CFPB Enforcement Action against Student Loan Trusts

On April 29, 2022, the U.S. Court of Appeals for the Third Circuit granted a petition for permission to appeal in Consumer Financial Protection Bureau v. The National Collegiate Master Student Loan Trusts filed by defendants The National Collegiate Student Loan Trusts (the “Trusts”) and certain interveners in the action.

Student debt ticks higher as the future of loan forgiveness remains uncertain

Average tuition and fees for the 2021-2022 academic year increased by 1.6%, to $10,740, for in-state students at four-year public colleges, according to the College Board, which tracks trends in college pricing and student aid. The data also showed tuition and fees at four-year private institutions rose by 2.1% to $38,070.

How to prevent and report scams targeting older adults

Scammers use lots of different tactics — stories about grandchildren in distress, million-dollar prizes, a romantic future, or a business deal — to try to steal peoples’ money. Scammers may demand payment by wire transfers, gift cards, and cryptocurrency — methods that transfer funds quickly and anonymously.

Overcharging for add-on products on auto loans

The Consumer Financial Protection Bureau is committed to ensuring a fair, transparent, and competitive auto lending market, and we are taking action against sloppy servicing practices that cause harm. Some of these practices involve optional, add-on products that consumers can purchase when they purchase a car. For example, guaranteed asset protection (GAP) products offer to help pay off an auto loan if the car is totaled or stolen and the consumer owes more than the car's depreciated value.

LendingClub, PayPal Results Show Consumers Embracing Credit Alternatives Amid Rising Rates

The consumer is resilient. But pressured. And examining options to battle back against rising interest rates and inflation. Earnings results from any number of banks and payments networks have pointed to a continued willingness on the part of U.S. consumers to use credit cards to spend in pursuit of what they need.

California Strikes Back: Filing Cross-Complaint Alleging FinTech is “True Lender,” Seeks $100M Penalty

On April 8, the California Department of Financial Protection and Innovation (DFPI) filed a cross-complaint against a Chicago-based FinTech company alleging that as the “true lender” of consumer installment loans, it is subject to and also violated the Californian Financing Laws (CFL) by making loans in excess of the CFL 36% rate cap and that the FinTech violated the California Consumer Financial Protection Law (CCFPL) by offering and collecting on loans with rates exceeding the rate cap.

Consumer advisory: Don’t give money or information to scammers promising student loan forgiveness

Numerous student loan borrowers recently submitted complaints to the Consumer Financial Protection Bureau (CFPB) about companies that promised them student loan forgiveness or loan forbearance in exchange for fees amounting to hundreds or thousands of dollars. Borrowers believed they were talking to their servicer or a company authorized by the Department of Education because they often knew private information such as the borrower’s loan balance or recent consolidation activity. This is fraud.

CFPB Supervisory Report Finds Unlawful Auto Repossessions, Breakdowns in Credit Report Disputes

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights report on legal violations identified during the CFPB’s supervisory examinations in the second half of 2021. The report details key findings across consumer financial products and services.

Idaho Updates Requirements for Collection Agency Licensees

Idaho recently enacted a bill, House Bill 610 (HB 610), that updates certain licensing requirements for collection agencies. The changes made by HB 610 will go into effect on July 1, 2022.

FTC, DOJ Seek to Enjoin Internet Provider From Facilitating Illegal Robocalls

On April 26, the DOJ filed a federal complaint on behalf of the FTC against a Voice over Internet Protocol (VoIP) service, a related company, and its owner for allegedly facilitating the transmission of illegal telemarketing robocalls.

Department of Education for Student Loan Relief on Behalf of Californians Defrauded by Education Corp. of America

OAKLAND – California Attorney General Rob Bonta today, as part of a multistate coalition, submitted a “borrower defense” application to the U.S. Department of Education (ED) on behalf of California students defrauded by Education Corp. of America (ECA). ECA operated a number of predatory for-profit schools in California before it abruptly shut its doors in December 2018.

CFPB Obtains Ban Against Debt Relief CEO Daniel Crenshaw

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) filed a proposed order to resolve its allegations that Performance SLC, a student loan debt relief business, and Performance Settlement, a general debt-settlement company, along with their owner and CEO, Daniel Crenshaw, engaged in wrongful fee-charging practices and deceptive telemarketing. Performance SLC unlawfully collected upfront payments from borrowers and did not provide required disclosures. Performance Settlement settled debts without the required consumer authorization and tricked certain consumers into enrolling into its debt-resolution services.

Colorado Bill Aims to Limit Debt Collections, Boost Price Transparency

April 28, 2022 - The Colorado House has passed a bill that seeks to prohibit hospitals from pursuing debt collections against patients if the health system does not comply with the CMS hospital price transparency rule.

Education Department Approves $238 Million Group Discharge for 28,000 Marinello Schools of Beauty Borrowers Based on Borrower Defense Findings

Today, the Department of Education announced it will deliver relief to tens of thousands of borrowers harmed by pervasive and widespread misconduct at Marinello Schools of Beauty. Borrowers who enrolled in the schools from 2009 through its closure in February 2016 will receive loan discharges based on borrower defense findings.

Community Banks and Overdrafts — Time for Reconsideration?

Bank consumer overdraft fees (together with nonsufficient funds (NSF) fees and returned check fees) have long been a target of attacks by consumer advocacy groups and progressive politicians who claim that such fees are disproportionately levied on the most vulnerable consumers.

Federal Trade Commission Proposes Small Business Protections Against Telemarketing Tricks and Traps

The Federal Trade Commission today proposed extending protections against telemarketing tricks and traps to small businesses and strengthening safeguards against other pernicious telemarking tactics plaguing consumers. The agency is seeking comments on updates to the Telemarketing Sales Rule that would protect small businesses against business-to-business telemarking schemes, address tech-support scams that target seniors, and extend click-to-cancel requirements to telemarketing. 

CFPB Director Testifies Before Congress

This week, CFPB Director, Rohit Chopra, appeared before the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Committee on Financial Services in conjunction with the CFPB’s submission of its Semiannual Report to Congress. In his prepared testimony before both committee, the Director highlighted some of the CFPB’s work over the past six months, which includes:

Congress should push CFPB to focus on bad actors, not credit unions

The Consumer Financial Protection Bureau (CFPB) has missed many opportunities to leverage credit unions’ mission, CUNA, AACUL, and the Leagues wrote to the House Committee on Financial Services on Tuesday.

Attorney General James Secures Student Debt Relief for Thousands of New Yorkers

NEW YORK – New York Attorney General Letitia James today secured student debt relief for thousands of New York borrowers whose federal loans were allegedly mismanaged by the Pennsylvania Higher Education Assistance Agency (PHEAA).

Director Chopra’s Prepared Remarks on the Lawsuit Against MoneyGram

Millions of individuals from around the world sacrifice proximity to their loved ones to seek a better life and financial stability in our country. But they know that on the other side, when their money transfers are received, they are supporting elderly parents, siblings, spouses, and sometimes their own young children. Each year, American families send more than $100 billion abroad using international money transfers, also known as remittances.

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