CFPB Orders Scam’s Ringleaders to Pay More Than $8 Million to Consumers and Student Loan Borrowers

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) finalized an enforcement action against debt-relief payment-processors RAM Payment and Account Management Systems (AMS), as well as AMS’s co-founders, Gregory Winters and Stephen Chaya, for collecting debt-relief fees from consumers, lying to consumers about when the fees would be paid to debt-relief companies, and sending illegal advance fees to debt-relief companies before they were legally allowed to do so. They also failed to return funds to consumers who cancelled student-loan debt relief agreements, as required by law. The CFPB is ordering RAM Payment, AMS, Winters, and Chaya to pay more than $11 million in consumer redress and civil money penalties.

CFPB’s Opinion on Fair Lending Rules Could Extend to AI

The Consumer Financial Protection Bureau (CFPB) has published an advisory opinion to affirm that banks and other lenders need to follow fair lending laws when canceling loans or changing terms and not just during the application process. According to the advisory opinion published on Monday (May 9), some lenders have been following the Equal Credit Opportunity Act (ECOA) only when issuing loans. But the CFPB interprets Regulation B, the ECOA’s implementing rule, as applying to “approval, denial, renewal, continuation or revocation of any open-end consumer credit account.” This means rules apply before and after the bank approves the credit, the CFPB argued.

Medical debt has dropped during pandemic, new research shows. That trend soon could shift

The share of adults ages 18 through 64 who carry medical debt dropped to 16.8% in April 2021 from 23.6% in March 2019, according to a new study from the Urban Institute, a think tank focused on economic and social policy research. Yet as federal programs that have allowed people to secure affordable health coverage during the pandemic inch closer to ending, problems paying medical bills could rise again.

Household debt nears $16 trillion despite rising rates and inflation

Even with rampant inflation and rapidly accelerating interest rates, household borrowing climbed to start 2022 and hit a new record, the Federal Reserve reported Tuesday.

Student loan debt hits another record high despite payment forbearance

Student debt hit another all-time high in the first quarter of 2022, reaching $1.59 trillion, according to data released by the Federal Reserve Bank of New York on Tuesday. This debt category accounts for just over 10% of total household debt, which is nearing a whopping $16 trillion. This is the second-largest category of consumer debt, behind home mortgages. This news comes amid rumors that the Biden administration is considering $10,000 in federal student debt forgiveness, and after another extension of the federal student loan payment forbearance until Aug. 31.

New BNPL Study Shatters Myths about Millennials and Gen Z and Creates Opportunities for Banks

CHICAGO, May 10, 2022--(BUSINESS WIRE)--A new consumer study shatters perceptions about Millennials and Generation Z consumers when it comes to their preferences and eligibility around innovative financing products.

U.S. Senate panel advances bill to help FTC fight deception, fraud

WASHINGTON, May 11 (Reuters) - U.S. lawmakers on Wednesday sent to the Senate floor a Democratic-backed bill that would allow the Federal Trade Commission to force deceptive companies to return money to victims.

Support Spanish-speaking customers with Spanish-language disclosures

Financial service providers increasingly recognize the need for more services and customer-facing materials in languages other than English. Over the years, we have encouraged financial institutions to provide fair and transparent access to products and services to people who are more comfortable using a language other than English.

CFPB issues advisory opinion on fair-lending laws

WASHINGTON — The Consumer Financial Protection Bureau on Monday issued an advisory opinion affirming that the federal prohibition against discrimination in lending applies to all aspects of a credit decision — not just the application process. 

Nonbank Financial Companies Now Covered By Consumer Laws

The Consumer Financial Protection Bureau (CFPB) recently welcomed nonbank fintech companies to the world of CFPB regulation. It did so by announcing its intent to use its long-dormant authority to hold nonbank financial companies to the same standards as traditional banking institutions when it comes to consumer financial products and services.

En banc Fifth Circuit rules CFPB enforcement action can proceed against All American Check Cashing but concurring opinion creates potential for further constitutional challenge based on CFPB’s funding mechanism

The en banc U.S. Court of Appeals for the Fifth Circuit has ruled that the CFPB’s enforcement action against All American Check Cashing can proceed despite the unconstitutionality of the CFPB’s single-director-removable-only-for-cause-structure at the time the enforcement action was filed.  However, in a concurring opinion, five judges expressed their agreement with All American’s argument that the unconstitutionality of the CFPB’s funding mechanism requires dismissal of the enforcement action.

The CFPB’s 2021 Fair Lending Annual Report to Congress

Today, the CFPB released its annual Fair Lending Report to Congress , detailing the important fair lending work undertaken in 2021, which focused on racial and economic equity issues and the COVID-19 recovery.

Payday loan borrowers charged steep rollover fees despite consumer protections: CFPB

Payday lenders provide small-dollar loans that are repaid in a single lump-sum installment, typically on the borrower's next payday. While these loans may offer fast funding without a credit check, they often trap consumers in a cycle of debt due to the short repayment term and high annual percentage rate (APR).

CFPB Issues Advisory Opinion on Coverage of Fair Lending Laws

Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) published an advisory opinion to affirm that the Equal Credit Opportunity Act (ECOA)—a landmark federal civil rights law protecting individuals and businesses against discrimination in accessing and using credit—bars lenders from discriminating against customers after they have received a loan, not just during the application process.

FTC Joins Amicus Brief Opposing Liability Shield for Sloppy Credit Reports

The Federal Trade Commission has joined the Consumer Financial Protection Bureau in an amicus brief filed with the United States Court of Appeals for the Second Circuit in the case of Sessa v. TransUnion. The brief asks the court to overturn a lower court decision, which held that TransUnion was not liable for failing to investigate a wrongfully reported debt because the inaccuracy was “legal” and not “factual.”

This is how student loan debt became a $1.7 trillion crisis

For decades now, the country’s outstanding student loan debt balance has only trended in one direction: Up. Today, around 44 million Americans owe a combined $1.7 trillion for their education. But it didn’t have to be this way.

FTC Acts to Shut Down ‘The Credit Game’ for Running a Bogus Credit Repair Scheme that Fleeced Consumers

At the request of the Federal Trade Commission, a federal court has temporarily halted a bogus credit repair scheme known as The Credit Game for promoting a series of lies and deceptions. The FTC alleged the scheme’s operators lied to credit reporting agencies regarding information on consumers’ credit reports and pitched consumers a supposed business opportunity that was essentially starting their own bogus credit repair scheme.

CFPB Supervisory Report Finds Issues in Several Financial Institution Practices

On May 2, the Consumer Financial Protection Bureau (CFPB or Bureau) released its Supervisory Highlights report on legal violations discovered during examinations in the second half of 2021.

Credit reporting companies and furnishers have obligations to assure accuracy in consumer reports

Even a seemingly minor inaccuracy in a credit report can lead to a consumer being denied a loan, housing, or job. However, credit reporting companies’ customers are usually the lenders, landlords, and employers who purchase credit reports, not the consumers whose financial lives are affected by them. This raises a real concern that credit reporting companies won’t pay enough attention to disputes or other issues that consumers raise about their reports.

Student debt collector argues suing borrowers was harmless | Reuters

(Reuters) - A debt collector that serviced student loans after they were bundled and sold to investors urged a judge in Manhattan on Thursday to throw out a proposed class action alleging it lied in debt collection cases across the country.

FTC Takes Action Against Frontier for Lying about Internet Speeds and Ripping Off Customers Who Paid High-Speed Prices for Slow Service

The Federal Trade Commission has moved to stop internet service provider Frontier Communications from lying to consumers and charging them for high-speed internet speeds it fails to deliver. Under a proposed order with the FTC and two California law enforcement agencies, Frontier will be prohibited from tricking consumers about its slow internet service and required to support its speed claims. Frontier must also provide current customers with free and easy cancellations when it fails to deliver the promised speeds.

Exams lead to remediation for private loan servicers’ unfair practices

This week we announced a series of examination findings documenting private student loan servicers’ failure to comply with the terms of their own loans or modifications. When a financial institution commits to something – whether it’s in a loan note, advertisement, or phone call – we expect it to follow through. That’s why we directed these companies to provide significant remediation amounts for failing to make promised payments to consumers.

Statement of CFPB Director Rohit Chopra, FDIC Board Member, on the Notice of Proposed Rulemaking Regarding the Community Reinvestment Act

Today, the Board of Directors of the Federal Deposit Insurance Corporation is voting to seek public comment on a Notice of Proposed Rulemaking to update the Community Reinvestment Act framework for certain state-chartered banks.

Seventh Circuit Provides Rare Guidance On “Statutory Liens”

On April 21, 2022, the U.S. Circuit Court of Appeals for the Seventh Circuit issued a decision interpreting the Bankruptcy Code’s definitions of “statutory lien” and “judicial lien,” holding that a lien imposed by the Chicago Municipal Code was “judicial” rather than “statutory” because it arose partly as the result of a “quasi-judicial” process rather than “solely by force of a statute.” In the Matter of Mance, No. 21-1355, 2022 WL 1182416 (7th Cir. April 21, 2022).

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