Last month, the CFPB released its spring 2022 Supervisory Highlights, detailing its recent supervisory and enforcement actions spanning from July 2021 through December 2021. The CFPB publishes Supervisory Highlights to help financial institutions better understand how they are being examined for compliance with federal consumer financial laws.

Supervisory Observations including violations of federal laws, regulations and prohibited unfair, deceptive, or abusive acts or practices (UDAAPs) occurred in the following areas:

• Auto Servicing 
• Consumer Reporting
• Credit Card Account Management
• Debt Collection
• Deposits
• Mortgage Origination
• Prepaid Accounts
• Remittances
• Student Loan Servicing

Supervised entities should take note of the CFPB’s continued focus on these issues. The Supervisory Highlights also discussed Supervisory Program Developments. These Developments include:

• The CFPB is invoking dormant authority to examine nonbank financial companies that pose risks to consumers. There are three categories of entities subject to the CFPB’s nonbank supervision program: 1. all nonbank entities in the mortgage, private student loan, and payday loan industries; 2. “larger participants” in other nonbank markets such as consumer reporting, debt collection, student loan servicing, international remittances, and auto loan servicing; and 3. nonbanks whose activities the CFPB has reasonable cause to determine pose risks to consumers (no specific product or service included in this category).
• The CFPB published an updated UDAAP exam manual which now includes discriminatory practices that may fall under the “unfair” prong. CFPB will now be looking at all credit/deposit products for unfair discriminatory practices, beyond transactions covered under the Equal Credit Opportunity Act.
• The CFPB is stepping up scrutiny of student loan servicers that deceive borrowers about their eligibility and benefits under the Public Service Loan Forgiveness Waiver.
• The CFPB released a bulletin reminding debt collectors of their legal obligations in light of the No Surprises Act, which protects consumers from some unexpected medical bills.

The Supervisory Highlights also detail recent public enforcement actions. You can read the full Supervisory Highlights here.

If you have any concerns about the potential impacts on any of these enforcement actions, please contact our office.

Jennifer Winston
Messick Lauer & Smith P.C.
jwinston@cusolaw.com