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Disparate impact on the ropes: federal district court vacates HUD rule

Posted in Fair Credit

A federal district court in Washington, D.C. dealt a heavy blow on Monday to HUD’s position that disparate impact claims are cognizable under the Fair Housing Act (FHA).  In American Insurance Association v. U.S. Department of Housing and Urban Development, a case we have been watching for some time, the court issued an opinion vacating the HUD disparate impact rule on the ground that “the FHA prohibits disparate treatment only, and that the defendants, therefore, exceeded their authority under the” Administrative Procedure Act.  The court’s concluding admonition – “This is yet another example of an Administrative Agency trying desperately to write into law that which Congress never intended to sanction.” – could just as easily have been directed to the CFPB’s assertion in Bulletin 2013-02 that disparate impact claims are cognizable under the Equal Credit Opportunity Act.  For a detailed discussion of the opinion, see our legal alert.

HUD’s position could soon be dealt a knockout blow by the U.S. Supreme Court.  The issue of whether disparate impact claims are cognizable under the FHA is now before the Supreme Court as a result of the court’s recent grant of the certiorari petition filed by the Texas Department of Housing and Community Affairs in Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc.  Should the court finally get the opportunity to rule on the merits (having been denied that opportunity twice before), it is widely expected to reach the same conclusion as that reached by the Washington, D.C. district court.


CFPB and Fed to conduct Nov. 18 webinar on TILA-RESPA integrated disclosures rule

Posted in Mortgages

On November 18, the CFPB and the Federal Reserve will co-host the fourth in a series of webinars on the TILA-RESPA integrated mortgage loan disclosures rule.  The webinar will focus on how to complete the new closing disclosure form.  A link to register is available here.

See our prior blog posts for details about the information provided to participants at the three webinars conducted earlier this year on June 17, August 26, and October 1.

CFPB QM cure and other mortgage rule amendments now effective; HUD nixes CFPB cure for FHA QM rule

Posted in Mortgages

The CFPB’s final rule amending certain provisions of the 2013 Title XIV final mortgage rules which includes a post-consummation points and fees cure mechanism for qualified mortgage loans, became effective on Monday, November 3, when it was published in the Federal Register.  (The only exception is a commentary revision in the final rule dealing with the relationship between the QM cure and the RESPA/Regulation X tolerance cure under the
TILA-RESPA integrated disclosure rule that becomes effective next year.)  The cure provision will apply to loans consummated on or after November 3, 2014 and on or before January 10, 2021.

The CFPB’s final rule also includes an amendment to the exemption in the ability-to-repay rule for certain nonprofits that make mortgage loans to low or moderate income borrowers from certain provisions of the rule if they make no more than 200 dwelling-secured loans per year and meet other specific requirements.  The rule amended the exemption so that subordinate lien loans for down payment assistance and certain other purposes that are interest-free, forgivable, and meet certain other conditions (so-called “soft seconds”) would not count toward the annual 200 loan limit.

In an announcement also published in the November 3 Federal Register, HUD announced that it was adopting the CFPB’s amendment to the nonprofits exemption for purposes of HUD’s QM rule that applies to FHA-insured mortgages.  However, HUD also announced that it was not adopting the CFPB’s post-consummation QM cure mechanism for purposes of HUD’s QM rule.  Among the reasons given by HUD is that FHA loans must meet all eligibility requirements, including the QM points and fees limit, prior to insurance endorsement and the CFPB’s cure is inconsistent with this requirement because it would allow a points and fees cure beyond insurance endorsement.


Leading industry trade groups comment on HMDA/Reg. C proposal

Posted in CFPB Rulemaking, Mortgages

Six leading industry trade groups have submitted a letter commenting on the CFPB’s proposed rule amending Regulation C to expand Home Mortgage Disclosure Act data reporting requirements.  The trade groups consist of the Consumer Bankers Association, Mortgage Bankers Association, American Bankers Association, Consumer Mortgage Coalition, Financial Services Roundtable and Housing Policy Council.

In the letter, the trade groups question the CFPB’s proposal to add various new data fields, including automated underwriting recommendations, borrower paid origination charges, total points and fees, total discount points, interest rate, prepayment penalty, QM status and HELOC first draw amount.  The trade groups ask the CFPB to weigh the consequences and value of adding the new fields.

The trade groups also urge the CFPB:

  • Not to extend the scope of Regulation C to require reporting of commercial and other loans that are for purposes other than home mortgage financing
  • To keep all additional data collected under the proposal private pending promulgation of privacy and data security rules to protect the confidentiality of HMDA data
  • To adopt a reasonable implementation schedule and not require HMDA reporting under a new rule earlier than 24 months after the January 1st following issuance of a final rule
  • To codify data integrity standards with reasonable tolerances either in Regulation C or authoritative guidance
  • To adopt a higher reporting threshold of at least 250 home mortgage financing transactions each year for both depository and non-depository institutions
  • To conform Regulation C with related mortgage regulations and industry standards, and
  • To coordinate with the prudential regulators before making changes that may affect CRA reporting.


OIG identifies five major CFPB management challenges

Posted in CFPB General

The joint Federal Reserve/CFPB Office of the Inspector General (OIG) recently issued its first listing of “major management challenges” facing the CFPB.  These challenges represent what the OIG believes to be “the areas that, if not addressed, are most likely to hamper the CFPB’s accomplishment of its strategic objectives.”  To identify the challenges, the OIG used audit and evaluation work it performed and audits performed by the U.S. Government Accountability Office, along with CFPB documents.

The OIG identified the following five management challenges for the CFPB:

  • Improving the operational efficiency of supervision.  The OIG’s evaluation work found that the CFPB needs to (1) improve its timely issuance of examination reports, (2) establish standards for the timely input of data into its supervisory examination system, and
    (3) establish a formalized policy for scheduling and tracking examination staff hours.
  • Building and sustaining a high-performance workforce.  The OIG observes that the CFPB faces challenges in building its workforce due to competition for qualified staff with the unique skill sets needed.  To accomplish that goal, the OIG believes that the CFPB will need to (1) strengthen workforce planning, including by identifying mission-critical technical, managerial, and leadership skills, (2) recruit, appropriately train, and retain a highly skilled, diverse workforce, and (3) develop an effective human capital infrastructure, including improving the CFPB’s compensation and benefit policies and establishing a new performance management system (to replace the system that resulted in disparities in evaluations based on factors such as race and age).
  • Implementing new management operations.  The OIG believes the CFPB needs to focus on establishing internal controls, including policies and procedures that clearly define roles and responsibilities, and effectiveness measures.  The OIG identified the CFPB’s civil penalty fund (CPF) and consumer complaint database as specific program areas on which the CFPB needs to focus.  With regard to the CPF, the OIG observes that the CFPB may face challenges in distributing funds to victims in a timely manner as the CPF continues to grow.  The CFPB must use the CPF to compensate consumers harmed by the activities for which civil penalties have been imposed and to the extent victims have already been compensated, cannot be located, or payment is otherwise not practicable, the CFPB can use the CPF for consumer education and financial literacy.  (As we have commented, although the CFPB cannot use CPF for operating expenses, the CFPB presumably has more funds available to use for other purposes (such as enforcement activities) to the extent it uses the CPF for consumer education and financial literacy programs.)  As to the complaint database, the OIG observes that the expansion of the products and services covered  by the database will challenge the CFPB’s ability to manage complaints, improve data quality, and maintain the effectiveness of the complaint process.  The OIG also observes that the CFPB’s plan to publish consumer narratives will create additional challenges in ensuring that personally identifiable information is properly protected.  (We previously commented that the CFPB’s plan appears to be turning the database into a gripe site.)
  • Providing for space needs. The OIG observes that the CFPB’s headquarters renovation project presents various challenges for the CFPB, including managing and mitigating risks such as potential scope changes, schedule delays, unanticipated expenses, and cost overruns. (As we have reported, the ballooning costs of the renovation have been the subject of Congressional criticism.)  The OIG also observes that space planning will be required during and after the headquarters renovation.  Surprisingly, the OIG observes that once the renovation is complete, the CFPB will still need additional space.
  • Ensuring an effective information security system.  The OIG believes the CFPB needs to (1) continue to improve its information security program, (2) take additional steps to ensure contractors used by the CFPB to operate and maintain information systems meet applicable information security requirements, (3) fully transition from Treasury’s information security and IT resources and complete development of the CFPB’s own IT infrastructure, and (4) take steps to ensure that personally identifiable information is adequately protected.  (In September 2014, the GAO issued a report on the CFPB’s data collection efforts in which it found that the CFPB needed to do more to reduce the risk of improper collection, use or release of such data.  The CFPB’s data collection efforts have also been the focus of criticism from lawmakers.)

The OIG also provides an outline of its ongoing and planned work relevant to the management challenges it has identified.

Mortgage Loan Originator “Target Pricing” in the Fair Lending Bullseye

Posted in Fair Lending, Mortgages

The Federal Reserve Board indicated it is scrutinizing mortgage loan pricing models that comply with Regulation Z but nonetheless, in the view of the Board, significantly increase fair lending risk.  The models set a loan revenue target—based on a higher interest rate, discretionary fees, or both—that varies by mortgage loan originator (MLO).  Regulators allege that setting different target prices for MLOs creates a risk of disparate impact if MLOs with higher target prices are concentrated in minority neighborhoods.  While not a new theory, we expect it to feature more prominently in the CFPB and other regulators’ mortgage loan examinations and enforcement actions so long as disparate impact remains a viable basis of discrimination under fair lending laws.

In remarks during a federal interagency webinar on October 22, Maureen Yap, Special Counsel/Manager in the Fair Housing Enforcement Section of the Federal Reserve Board’s Division of Consumer and Community Affairs, said that the Board has referred one such case to the Department of Justice for a possible enforcement action.  This warning shot should remind bank and non-bank mortgage lenders that compensation models compliant with Regulation Z’s loan originator compensation rule (“LO Comp Rule,” or “Rule”) may still create risks for consumers and originators.

The LO Comp Rule was adopted by the Federal Reserve Board in 2010 and then transferred to the CFPB, which amended the Rule effective in 2014 based on Dodd-Frank.  The Rule prohibits basing a loan originator’s compensation on any term of a transaction or proxy for a term, other than paying compensation based on a fixed percentage of the amount of credit extended.  Compensating MLOs through a percentage of the amount of credit extended was and remains a common practice.

According to the Federal Reserve Board, under a target pricing model, MLOs are paid a fixed percentage of the loan amount in accordance with the LO Comp Rule, but are directed to hit a revenue target on each loan through additional interest or fees, or a combination of the two.  The target is specific to the MLO and is not based on a borrower’s credit characteristics.  According to Ms. Yap, the Federal Reserve Board has found that target pricing may cause statistically significant differences in rates and fees charged to minority borrowers compared to similarly situated white borrowers, based on which MLOs serve minority neighborhoods.

The Federal Reserve Board advises that lenders setting target prices for MLOs should do the following to mitigate fair lending risk:

  • Monitor pricing by race and ethnicity across MLOs;
  • Map loans by target price to identify potential reverse redlining;
  • Review pricing models in software, including software provided by vendors; and
  • Minimize differences in target prices assigned to MLOs within the same geographic area.

The U.S. Supreme Court recently, and for the third time, granted certiorari on the issue of whether disparate impact claims are cognizable under the Fair Housing Act.  We wrote about the case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc., here and here.

CFPB Joins Forces with FDIC on Spanish-Language Tool to Prevent Senior Financial Abuse

Posted in Elder Financial Abuse, Financial Literacy

Recently the CFPB joined the FDIC’s program against financial abuse of senior citizens by cooperating on the creation of a Spanish language tool for Hispanic seniors.  We have previously blogged about the CFPB’s initiatives to prevent elder financial abuse.  This new product is a Spanish-language version of a pre-existing FDIC publication in English, Money Smart for Older Adults, which is a financial resource tool that is distributed free of charge and is designed to help adults age 62 and older and their caregivers prevent, identify, and respond to elder financial exploitation.

Inaugurated in 2001, the Money Smart program is a comprehensive financial education curriculum designed to help low- and moderate-income individuals outside the financial mainstream enhance their financial skills and create positive banking relationships.  The specific, instructor-led module for senior citizens was developed by the two agencies last year, and the Spanish-language version, Money Smart Para Adultos Mayores: Prevener la Explotaciόn Financiera, is the latest offering.  A participant/resource guide and PowerPoint slides in Spanish can be downloaded from the FDIC website and can be ordered in hard copy from the CFPB website.

This effort to provide financial education to seniors for whom English is not the first language is laudable, to be sure, but it raises an obvious policy question.  In recent years the Justice Department’s Civil Rights Division has investigated, pressured, and entered into agreements with several states in connection with providing interpreters for non-English speaking litigants in the courts, not just criminal defendants but civil litigants and not just Spanish-speaking but all non-English-speaking immigrants.  If federal agencies provide assistance to Hispanic immigrants, must they also provide foreign language financial education products to other elderly people, e.g., immigrants from China, Cambodia, former Soviet republics, and so forth?  Is failure to do so discriminatory?

Former CFPB examiner-in-charge Bo Ranney joins Ballard Spahr and will share his insights in a Dec. 9 webinar

Posted in CFPB Exams

I am pleased to introduce my new colleague Bo Ranney to our blog readers.  Bo joins Ballard Spahr’s Consumer Financial Services Group after having spent three years at the CFPB.  I expect Bo to be a valuable resource to our clients, particularly in preparing for CFPB exams and in dealing with CFPB examiners during the course of an ongoing exam.

Bo joined the CFPB’s Office of Supervision in October 2011.  Although based in Supervision, Bo also had opportunities during his tenure with the CFPB to work on matters for the CFPB’s Office of Enforcement and Research, Markets, and Regulations (RMR) Division.

While in Supervision, Bo was involved in numerous compliance examinations of bank and nonbank institutions and led exam teams as the examiner-in-charge.  In conducting the exams, Bo reviewed an institution’s consumer files and internal documents to ensure compliance with federal consumer financial protection laws.  He also regularly met with senior management at financial institutions to discuss alleged violations discovered during an exam and collaborated with CFPB Supervision Policy and Enforcement staff regarding how the Bureau should address such violations, including whether they should be identified as a matter requiring attention (MRA) in the exam report or considered for a public enforcement action.

As part of his work in Enforcement, Bo played a key role on the team that filed the CFPB’s first application for a temporary restraining order in a matter that involved a law firm that allegedly engaged in unlawful mortgage modification practices.  He also worked on cases involving alleged violations of the Consumer Financial Protection Act, the Fair Debt Collection Practices Act, the Mortgage Assistance Relief Services Rule, and the Telemarketing Sales Rule.  While in RMR, Bo worked across multiple Bureau Divisions to help produce small entity compliance guides addressing the Bureau’s new mortgage rules and related web content.

On December 9, from 12:00 PM to 1:00 PM ET, Bo will be sharing insights from his tenure at the CFPB in a webinar, “Everything You Want To Know About CFPB Exams but Have Been Afraid To Ask: An Insider’s Perspective.”  A link to register is available here.

Mortgage company that entered into CFPB consent order moves to dismiss class action claims

Posted in CFPB Enforcement, Mortgages

Earlier this week, Castle & Cooke Mortgage, LLC, the mortgage company that entered into a consent order with the CFPB in November 2013 to settle charges that it violated the
Regulation Z loan originator compensation rule (“LO Compensation Rule”), filed a motion to dismiss three counts of the class action complaint filed against it in July 2014 in a California federal court by a consumer who received redress under the consent order.  As demonstrated by the class action filing, a CFPB consent order, in the absence of releases from affected consumers, does not necessarily bring finality to the issues it covers.

The CFPB’s complaint alleged that after the LO Compensation Rule became effective, to continue compensating its loan officers based on borrowers’ interest rates, the mortgage company devised a quarterly bonus system under which loan officers would receive greater bonuses for originating loans at higher interest rates.  According to the CFPB, the bonus system was not reflected in any compensation agreements.  While the company’s payroll records reflected the bonus payments, the CFPB claimed there was nothing indicating what portion of a loan officer’s quarterly bonus was attributable to a particular loan.  (The LO Compensation Rule was adopted by the Fed in 2010 and had a mandatory compliance date of April 6, 2011.  The CFPB’s January 2013 loan originator compensation rule, which is effective
January 10, 2014, continues the LO Compensation Rule’s prohibitions, with certain revisions.)

In agreeing to entry of the consent order, the company did not admit any of the CFPB’s allegations other than jurisdictional facts.  The consent order included a  judgment for equitable monetary redress against the company and two officers, jointly and severally, in the amount of $9,228,896.  It also included a judgment for a civil money penalty against the company and the two officers, jointly and severally, in the amount of $4.0 million.  When we reported on the consent order, we commented that the size of the monetary relief likely was intended by the CFPB to send a strong message to the mortgage industry that violations of the LO Compensation Rule will be addressed in a serious manner.

As the named plaintiff noted in his class action complaint, the consent order stated that the redress provided by the company “shall not limit consumers’ rights in any way.”  His complaint makes claims on behalf of a nationwide class, which is defined to include all individual consumers who on or after April 1, 2011 obtained a mortgage loan from the company in which the company paid a bonus or other compensation based on the loan terms other than the amount of credit extended or paid a referral fee or split a charge other than for services actually performed.  The complaint alleges that the company’s violations of the LO Compensation Rule entitle the named plaintiff and class members to actual and statutory damages.  It also alleges that the bonus payments, to the extent the recipients were not bona fide employees of the mortgage company, were unlawful referral fees or fee splits under RESPA entitling the plaintiff and class members to three times the loan origination and settlement charges they paid to the mortgage company.  The complaint also includes claims that the bonuses violated the Utah Residential Mortgage Practices and Licensing Act and constituted unjust enrichment under Utah law and, as to a California subclass, violated California’s Unfair Competition Law (UCL).

On October 27, the mortgage company filed a motion to dismiss the RESPA, Utah unjust enrichment and California UCL claims.  With regard to the RESPA claim, the company argues that the complaint alleges no facts showing that the company paid a referral fee in connection with the named plaintiff’s loan or paid anyone for services not provided.  Citing Ninth Circuit precedent that RESPA Section 8 does not prohibit overcharges, the company further argues that the named plaintiff still does not have a RESPA claim to the extent he is trying to allege that he was charged too much for his loan.  The company argues that the plaintiff’s Utah unjust enrichment and California UCL claims should be dismissed because his TILA/Regulation X and other claims provide an adequate legal remedy.  As a further reason for dismissal of the UCL claim, the company argues that only injunctive relief and restitution are available under the UCL and plaintiff’s claim is one for damages rather than restitution.



CFPB highlights unlawful practices relating to mortgage and student loan servicing, debt collection, electronic fund transfers and consumer reporting

Posted in CFPB Exams, Credit Reports, Debt Collection, Electronic Payments, Mortgages, Student Loans

While mortgage and student loan servicing violations cited by the CFPB in its Fall 2014 Supervisory Highlights have grabbed the headlines, the report also includes noteworthy observations regarding the violations found by the CFPB in debt collection, electronic fund transfers and consumer reporting. The report covers supervision work completed by the CFPB between March 2014 and June 2014.  As in prior supervisory reports, the CFPB continues to be imprecise as to the number of entities at which it found the various violations discussed, thereby obscuring the magnitude or pervasiveness of the purported problems and detracting from the transparency it has promised.

The violations found by the CFPB include the following:

Mortgage servicing.  The CFPB’s observations are based on targeted reviews it conducted for compliance with the new mortgage rules.  The CFPB found that “one or more servicers” did not have any policies and procedures relating to oversight of service providers as mandated by the new rules or had policies relating to service providers that did not satisfy specific regulatory requirements.  The CFPB also found violations relating to loan modifications.  “[I]in at least one examination,” CFPB examiners found that a servicer had failed to timely convert a substantial number of trial modifications to permanent modifications after successful completion of the trial modifications.  Observing that interest accrued during the delay at the original contract rate rather than the permanent modification’s lower rate, the CFPB indicates that “servicers” capitalized interest at the higher rate into the principal balance due under the modification and continued to report as delinquent borrowers who were delinquent at the beginning of their trial modifications.  The delays combined with the negative consequences attributable to the delays were found by the CFPB to constitute an unfair practice.

“At least one servicer” was found to have initially sent permanent modification agreements to borrowers that did not match the terms approved by its underwriting software and, after receiving signed agreements from such borrowers, sent the borrowers updated modifications with materially different terms.  Having characterized the initial agreements as “misrepresentations about the available terms,” CFPB examiners determined that “one or more servicers” engaged in a deceptive practice in connection with the modifications.  The CFPB’s examiners also identified a deceptive practice “at one or more servicers” based on the servicer having told consumers that it would not seek a short sale deficiency judgment but not specifically waiving the loan owner’s right to pursue a deficiency judgment in short sale approval agreements.

Student loan servicing.  The CFPB found that “one or more supervised entities” had engaged in an unfair practice by allocating partial payments proportionally, or pro rata, among all loans, thereby creating delinquencies on all of the borrower’s loans and then imposing a late fee charge on each loan.  “[O]ne or more supervised entities” were also found to have engaged in unfair or deceptive practices by charging late fees on full payments received during the grace period.

“[A] student loan servicer” was found to have engaged in a deceptive practice by inflating minimum payments on periodic statements and online account statements through the inclusion of accrued interest on loans that were still in deferment.  CFPB examiners found that “one or more student loan servicers” failed to provide consumers with information needed to deduct student loan interest payments on their tax returns, with “at least one examination” revealing that a servicer, without adequate disclosures, had engaged in a deceptive practice by requiring consumers to provide an additional certification regarding the loan’s use for higher education expenses to obtain 1098-E forms.  CFPB examiners found it was a deceptive practice for the servicer if the certification was not completed, to issue online account statements indicating that the borrower had paid no deductible interest when the borrower had in fact paid such interest.

Other CFPB findings were that (1) “one or more supervised entities” had engaged in deceptive practices by communicating to borrowers that student loans were never dischargeable in bankruptcy, and (2) “at least one examination” revealed that a servicer had engaged in an unfair practice by using an automated dialer to make calls to delinquent borrowers that was not programmed to account for borrowers’ locations, thereby causing borrowers to receive “inconvenient” calls in the early morning or late at night (presumably the servicer was not considered to be a debt collector but was calling borrowers at times that would have been deemed to be inconvenient under or otherwise prohibited by the Fair Debt Collection Practices Act ).

Debt collection.  CFPB examiners found “[i]n one or more examinations” that debt collectors had charged convenience fees to consumers who paid by credit or debit card and lived in states where (1) such fees were prohibited by state law, or (2) the law was silent regarding the legality of such fees and the agreements creating the debt did not expressly authorize such fees.  The FDCPA limits fees that can be charged by a debt collector to those expressly authorized by the agreement creating the debt or “permitted by law.”  The implication of the CFPB’s view that a debt collector violates the FDCPA by charging convenience fees when state law is silent and the agreement creating the debt does not expressly authorize such fees is that (notwithstanding case law to the contrary) a fee is not “permitted by law” within the meaning of the FDCPA when it is assessed pursuant to a subsequent contract.

“In at least one examination” CFPB examiners found that a debt collector violated the FDCPA by routinely threating consumers with litigation even though it only initiated litigation on a “small fraction” of the accounts it collected.  “During one or more examinations,” CFPB examiners found debt collector employees had violated the FDCPA by regularly identifying their employer without being expressly requested to do so as required by the FDCPA.  CFPB examiners “[i]n examining one or more financial institutions” found unfair practices relating to debt sales in the form of overstated APRs in the account documents provided to debt buyers and significant delays in forwarding to debt buyers post-sale payments received from consumers.

Electronic fund transfers.  CFPB examiners found violations of the Regulation E error resolution requirements, including by “one or more institutions” that, when receiving oral notice of an error from a consumer, did not initiate an investigation until the consumer returned a dispute confirmation form or told consumers complaining about unauthorized transactions that they must first contact the merchant before an investigation could begin.  “During one or more examinations,” CFPB examiners found a violation of  the Regulation E limits on consumer liability for unauthorized transfers by denying the claim of a consumer who was unable to explain how his PIN was compromised even though the consumer had provided details about the theft of his debit card and subsequent unauthorized PIN-based transfers.  CFPB examiners found that the standard error resolution notice used by “one or more of the financial institutions” examined failed to include a statement regarding the consumer’s right to obtain documentation relied on by the institution in investigating an error and that “at least one institution” used notice templates referring to the issuance of provisional credit regardless of whether such credit was issued.

Consumer reporting.  CFPB examiners found that “one or more” consumer reporting agencies (CRA) did not comply with the Fair Credit Reporting Act requirements regarding the information that must be included in a notice informing the consumer of the results of a reinvestigation triggered by a consumer’s dispute of the completeness or accuracy of his or her credit report information.  Other deficiencies observed by CFPB examiners were that the complaint procedures of “at least one or more nationwide CRA” failed to cover complaints received directly from consumers and “at least one specialty CRA” (1) provided inconsistent information to consumers about the ability to lodge disputes by telephone, and (2) maintained a weak consumer complaint program.

The CFPB’s report also includes a discussion of the CFPB’s use of resubmission standards in conducting Home Mortgage Disclosure Act data integrity reviews and recent CFPB public enforcement actions, supervisory guidance, and larger participant rulemaking.  Among those enforcement actions is the CFPB’s action against Flagstar Bank, which represented the CFPB’s first enforcement action related to its new mortgage servicing rules.