Links in “CFPB”

The use of big data in making credit decisions may present fair lending issues if its use causes disparate impact, according to this CFPB official. [2/5/16]

The CFPB issued a mandate to promote the existing obligations under the Fair Credit Reporting Act (FCRA) for furnishers of consumer information to consumer reporting agencies (CRAs) to establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information furnished to all CRAs. The mandate comes on the heels of recent CFPB reviews that found non-compliance with furnishers. [2/5/16]

In response to the CFPB's field hearing, the Credit Union National Association points out the credit union industry's long history of offering product choices to meet members' needs and hopes the CFPB doesn't place additional regulatory burdens that inhibit credit unions from further expanding their product offerings. [2/4/16]

There's no law that says you have to, but the CFPB, in that special way that only it can do, suggests you should. ABA says thanks for the suggestion. So does the CBA. [2/4/16]

Signaling what could be start of an industry-wide clamp down, the CFPB sent a letter to the big retail banks encouraging them to offer accounts that make it harder for frequent overdrafters to overdraft their accounts, such as prepaid accounts or accounts that don't permit overdrafts. It also raised concerns about consumer "blacklists" that make it difficult for frequent overdrafters to open accounts and warns that inaccurate reporting about frequent overdrafters could result in penalties. [2/3/16]

A House report finds that the CFPB's methodologies of identifying minority borrowers harmed by Ally Bank and subject to compensation were dubious. One group of 200,000 borrowers was sent a notice explaining that they would receive remuneration unless they opted out. Another group of 200,000 borrowers received letters telling them they had to opt in if they wanted remuneration. Less than 1% opted out of the first group. Nearly half the respondents opted into the second group. [2/3/16]

Over the life of a loan, the discretionary spread that Toyota dealers applied to loans ended up costing African-American borrowers $200 more and Asian borrowers $100 more than their white, similarly situated non-minority counterparts. That doesn't make the CFPB happy. Toyota is looking at $22 million in restitution and implementing new caps on dealer markups. [2/3/16]

What kinds of things are financial institutions doing that send up a flare to the Consumer Financial Protection Bureau in its search for fair lending violations? One good place to look is in the CFPB’s fall 2015 semi-annual report, where the bureau outlined those areas that indicate heightened fair lending risk. In other words, if the CFPB sees signs of these risks at a financial institution, that’s a trigger for them to dig deeper to look for evidence of fair lending violations. [2/2/16]

Debt-collection practices earns its 28th consecutive month as the number one consumer complaint. A recap of some of the other "lowlights" from the CFPB's monthly complaint snapshot are available here. [2/2/16]

CFPB has taken the use of enforcement action as a way to shape industry practices to a whole other level. [2/2/16]