Yesterday, the Consumer Financial Protection Bureau issued its Fall 2012 Supervisory Report discussing the degree to which financial institutions and service providers it regulates are complying with federal consumer financial laws. Part III of the report surveys significant legal violations detected by the CFPB
and what the agency is doing to remedy those violatons and deter future violations. The agency's press release accompanying the report highlighted these problems:
- Credit Cards: Bureau examiners found instances
where the credit limit of a consumer who was under 21, but whose account
was associated with a consumer 21 or older, was raised without consent
of the co-applicant. The Bureau found that these violations typically
occurred when an institution did not have proper procedures in place to
ensure that credit line increase requests are sent to the co-applicant
- Reporting to Credit Bureaus: The Bureau found that
not all relevant employees at supervised institutions had sufficient
training to comply with fair credit reporting requirements, which
sometimes resulted in inaccurate information about consumer’s accounts
being reported to credit bureaus. Inaccurate information in a consumer’s
credit record may cause a consumer to pay more for credit than would
otherwise be the case or be unjustifiably denied credit altogether.
- Mortgages: The CFPB found violations of federal
consumer financial law by financial institutions. These violations
include failure to provide borrowers with clear and timely disclosures
regarding the nature and costs of the real estate settlement process,
such as through inaccurate Good Faith Estimates or HUD-1 forms.
Violations also included failure to provide accurate disclosures of
interest rates, payment amounts, and payment schedules.
Jenna Greene at the National Law Journal has penned this article on the CFPB's report.