News

CFPB using authority to investigate all banks, non-banks

Richard Cordray

The Consumer Financial Protection Bureau said in its semi-annual report that the watchdog agency is investigating all banks and non-banks that span the range of the agency’s oversight authority.

“Enforcement has endeavored to focus its investigative resources on the violations of law that cause the greatest harm to consumers,” the agency said in its report. “The investigations currently under way span the full breadth of the Bureau’s enforcement jurisdiction. Further detail about ongoing investigations will not generally be made public by the Bureau until a public enforcement action is filed.”

The probes relate to all actions taken by the bureau, as well as complaint data from other federal regulators and American consumers. The agency, to date, has taken just one public enforcement action against Capital One Financial Corp for its deceptive marketing tactics.

The result was a $210 million settlement, in which Capital One was required to refund $140 million to consumers and pay a $25 million penalty to the CFPB. Capital One was also sanctioned by the Office of the Comptroller of the Currency and is required to pay a $35 million penalty.

Additionally, the agency took its first civil enforcement action on July 18 against a Los Angeles-based loan modification program, alleging that the firm tricked troubled homeowners into paying exorbitant upfront fees with false promises of altering their home loans.

“Based on the results of our initial investigation, the court has halted a loan modification scheme that we believe has been unlawfully preying on vulnerable homeowners in multiple states,” Kent Markus, the assistant director for enforcement at the CFPB, said, according to The Blog of LegalTimes. “This action allows us to prevent further harm to consumers and lawfully gather additional evidence and data as the case moves forward.”

The CFPB reiterated its commitment to examining and taking enforcement action in the mortgage industry.

“The Consumer Bureau is establishing evenhanded and reasonable oversight to the marketplace,” Richard Cordray, the director of the CFPB, said in the report. “We are working to root out unfair, deceptive or abusive practices. Consumers deserve to be treated fairly and to have someone stand on their side when they are not. Congress directed us to fix grave problems in the mortgage market, and we are well on our way to fulfilling that goal.”