The report focuses on auto lending, payday lending and medical debt.
07/26/2023 2:45 P.M.
2 minute read
The Consumer Financial Protection Bureau has released its latest Supervisory Highlights report with an overview of unfair, deceptive, and abusive acts or practices (UDAAP) across many consumer financial products.
The report covers findings from supervisory examinations conducted from July 2022 to March 2023.
“Today’s report furthers our efforts to highlight conduct that violates federal law, including the prohibition on abusive practices in consumer financial services,” said CFPB Director Rohit Chopra. “The CFPB is also inspecting more financial data brokers engaged in consumer reporting, as well as nonbank entities using authorities that previously went unused.”
Some key findings include:
- Examiners found that consumers were misled in marketing materials by auto lenders about the quality of car they were eligible for under the terms of an auto loan offer. Servicers also reportedly charged interest on loans based on fraudulent representations by dealers that the vehicle had options and enhancements that it did not actually have.
- Examiners found debt collectors continued collection attempts for “work-related medical debt” after receiving sufficient information to render the debt uncollectible under state worker’s compensation law. The examiners found the actions were violations of the Fair Debt Collection Practices Act.
- The CFPB examinations also found unfair and abusive acts employed by payday lenders in their collection practices. For example, lenders would put language in loan agreements that prohibited consumers from revoking their consent for the lender to call, text, or email the consumers about
Accounts receivable management industry companies can use the bureau’s semiannual supervisory highlights reports to measure compliance standards with regard to the bureau’s enforcement of federal consumer financial laws and to help limit risks to consumers as well as track areas the bureau is focused on in its supervisory examinations. When it comes to finding solutions to problems or creating new regulatory measures; however, the CFPB’s actions need to be based on current data and results from working with all stakeholders.
Regarding UDAAP, guidance for regulated entities has drawn comments from stakeholders seeking clarity on the proposals, ACA International previously reported.
Among the comments, ACA’s feedback (PDF) focused on how members benefit from clear requirements and standards, rather than uncertainty created by the policy statement, particularly the definition and guidance on “abusive.”
ACA is reviewing the Supervisory Highlights report and will provide any additional updates to members in ACA Daily.