Consumer Bureau Highlights That It Has Taken Enforcement Actions Under Mulvaney

The Consumer Financial Protection Bureau on Thursday released its first enforcement highlights report under acting Director Mick Mulvaney, drawing attention to fixes made by lending companies to bring themselves into compliance with consumer law.

The findings addressed automobile loan servicing, credit cards, debt collection, mortgage servicing, payday lending and small business lending largely from December 2017 to May 2018.

Coming as Mulvaney’s agenda has been derided by consumer advocacy groups as pro-corporate, the report “shares information regarding general supervisory and examination findings, communicates operational changes to the bureau’s supervisory program and provides information on recent bureau final rules.”

Under the 2010 Dodd-Frank Financial Reform Act, the bureau is authorized to supervise banks and credit unions with more than $10 billion in assets, as well as certain nonbanks.  The new iteration of a regular report noted that “institutions are subject only to the requirements of relevant laws and regulations,” and CFPB does not “impose any new or different legal requirements.”

The 22-page document reported two enforcement actions, the first against Citibank N.A., for violating the Truth in Lending Act by failing to periodically re-evaluate and reduce annual credit card percentage rates with clear written policies. The second action was taken in the form of a consent order with Triton Management Group Inc., a payday lender that operates in Alabama, Mississippi and South Carolina, for violating the Consumer Financial Protection Act and the Truth in Lending Act by failing to properly disclose finance charges associated with auto title loans in Mississippi.

In the area of auto servicing activities, the report said, the bureau continues “to assess whether servicers have engaged in unfair, deceptive, or abusive acts.” Examples included examinations that identified deceptive and unfair acts or practices related to billing statements and wrongful repossessions. In addition, consumers who experienced a “total vehicle loss” and were give a new payment schedule continued to be treated as failing to make payments, with that negative information reported to credit agencies.

In its discussion of fair lending testing of the underwriting model of a company called Upstart Network Inc., the report mentioned the bureau’s creation in July of an Office of Innovation, “to foster consumer-friendly innovation, which is now a key priority for the bureau.” That office is revising its previous agreements on disclosure policies with Upstart Network “in order to increase participation by companies seeking to advance new products and services.”

Bartlett Naylor, financial policy advocate for Public Citizen, noted that the report included only two enforcement actions, compared with six in the report released under previous CFPB Director Richard Cordray. 

This new report, Naylor said, “adds to the chilling narrative that Mulvaney is disarming the nation’s consumer protection agency. “It’s immediately telling that the Mulvaney cops redefine their role as promoting innovation, competition and fairness to ‘all parties,’” Naylor told Government Executive. The bureau under Cordray “rightly emphasized their mission as protecting consumers,” Naylor added, noting that while neither the Mulvaney nor Cordray reports enumerate violations in each sector, the “Cordray cops, covering the same period in the year before, list six infractions where they secured penalties and remedies for consumers, and Mulvaney found only two. “