In its latest blog post titled “The CFPB’s enforcement work in 2023 and what lies ahead,” the Consumer Financial Protection Bureau (“CFPB”) provides an overview of its 2023 enforcement activity and discusses expansion plans for 2024.
In general, the blog post details the CFPB’s most significant enforcement activities of the past year, including those in which the agency partnered with other federal, state, and local agencies to investigate wrongdoing by entities subject to the CFPB’s authority.
The CFPB states that enforcement activity in 2023 included filing 29 enforcement actions and resolving 6 previously filed lawsuits through final orders. Through those orders, the offending entities were required to pay approximately $3.07 billion to compensate consumers that were harmed, and an additional $498 million in civil money penalties.
The blog post highlights notable enforcement actions in 2023, including:
Protecting servicemembers from illegal high-interest loans and false advertising: A CFBP consent order shut down a group of corporate entities operating under one umbrella that focused on servicemembers. The group was found to have violated the Military Lending Act by charging more fees than legally permitted. The group was ordered to pay $5 million in consumer relief and $10 million in civil penalties. A separate entity was required to pay a $1 million dollar penalty for sending advertisements to military families that looked like they were government affiliated.
Action against bank for illegally charging junk fees, withholding credit card rewards, and opening fake accounts: The CFPB and the Office of the Comptroller of the Currency (“OCC”) entered into a consent order with a banking institution for alleged violations of charging multiple non-sufficient funds fees in connection with the re-presentment of the same unpaid transactions. A second consent order was entered into against the same bank for alleged violations of credit card practices that included misleading advertisements and accounts being opened without consumer consent.
Action taken against a banking institution for intentional, illegal discrimination against Armenian Americans: The CFPB ordered a banking institution to pay millions in fines and consumer redress for intentionally and illegally discriminating against applicants that applied for credit cards between 2015 and 2021 and identified as Armenian Americans. Applicants for certain credit cards were singled out for denial of their application based on their surname when it was thought to be of Armenian descent. The bank allegedly lied about the basis for the credit denials and provided false reasons to applicants. Under the order, the bank must pay $1.4 million to harmed applicants and $24.5 million in penalties.
Lawsuit to stop loan churning: The CFPB sued a finance company over alleged unfair, deceptive, or abusive acts or practices (“UDAAP”) violations of loan churning. The company was accused of “churning payment-stressed borrowers in fee-laden refinances” to collect hundreds of millions in loan costs and fees.
Action taken against TransUnion for illegal rental background check and credit reporting practices: The CFPB and Federal Trade Commission (“FTC”) entered into a settlement with TransUnion after it was accused of violating the Fair Credit Reporting Act (“FCRA”) and Consumer Financial Protection Act (“CFPA”) for failing to ensure the accuracy of tenant screening reports by including inaccurate and incomplete eviction records about consumers.
CFPB settled lawsuit against a group that ran the largest credit repair organizations n the United States: The group was accused of violating the CFPA by using marketing affiliates to obtain referrals of consumers and falsely representing the need to use their credit repair service to obtain products or services. The group was also accused of collecting illegal advance fees for credit repair services.
The blog post also touches on the CFPB’s planned expansion of enforcement capacity in 2024. The agency is planning to hire additional personnel for many positions, including enforcement attorneys, analysts, paralegals, e-litigation support specialists, economists and more. The positions will be added to the Washington D.C. headquarters, and regional offices in San Francisco, New York, Chicago, and Atlanta.
Click here to view the CFPB’s blog post.
