Here’s One Thing the CFPB Gets Right

There are many concerning aspects of the Consumer Financial Protection Bureau’s methods, not the least of which include its proclivity to regulate via enforcement and its reliance on overly broad and ambiguous language to support its activities. But when it comes to regulating Unfair, Deceptive, or Abusive Acts or Practices, the CPFB’s actions have, for the most part, been reasonably warranted. The CFPB recently took a series of UDAAP actions addressing a variety of wrongs in cases where, based on the allegations in recent cases, the misconduct was palpable. In one case, a mortgage servicer was fined and forced to pay damages for allegedly failing to honor trial modification periods from prior servicers and for unnecessarily prolonging trial modification periods. In another case, a debt collector was hit with penalties for purportedly making false threats against consumers and collecting debts consumers did not owe. Lastly, a mortgage servicer was pounded for falsely making claims of savings by collecting bimonthly payments that did not actually result in the savings promised. In addition, the servicer allegedly did not make the payments on behalf of consumers at the times promised. While the CFPB’s self-creation, and expansion, of omnipotent power is disturbing and worrisome for the future, for the present moment it appears the agency tactically chooses cases where the potential for objection is limited. Lenders should keep this in mind this when balancing current compliance and business needs.