May 22, 2014

CFPB reports on payday, other 'risky' activities

May 23, 2014 – CFPB highlights three nonbank markets – payday lending, debt collection and consumer reporting – in a report released Thursday that illustrates for all providers the types of "risky" activities likely to draw enforcement action and fines from the bureau.

In its recent Supervisory Highlights report, CFPB said that in its role supervising the above-noted activities in both the banking and nonbank sectors, it has generated more than $70 million in remediation to about 775,000 consumers.

"The CFPB's oversight of banks and nonbanks alike is exposing risky practices and getting results for consumers," said CFPB Director Richard Cordray.

Some examples of the types of activities flagged and acted on by CFPB include:

  • Payday lenders calling borrowers to collect debt and threatening legal action they don't intend to pursue. Examiners cited these threats as unlawful deceptive practices.
  • Debt collectors failing to investigate consumer credit report disputes.
  • Consumer reporting agencies not properly handling consumer credit report dispute documents. They generally just forward relevant dispute documents to data furnishers.

NAFCU is closely following CFPB's oversight of financial institution and nonbank activities and, with respect to the three areas targeted in CFPB's report, watching for any potential rulemaking that could affect credit unions.