The CFPB recently filed a $2.59 million federal complaint against EOS CCA, a debt collection firm based in Norwell, MA, accusing the company of reporting and collecting on old cellphone debt that consumers disputed and EOS did not verify. The company also allegedly provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate. The bureau’s action appears to revolve around the firm’s handling of just one large portfolio. According to the CFPB, in 2012, EOS paid AT&T $35.4 million for a portfolio of more than three million cellphone accounts with a total face value of $2.3 billion. “Many of these debts were old accounts that had been previously ...

Early this month, the CFPB denied a petition made by UniRush, the program manager for RushCard, a prepaid debit card, to modify a civil investigative demand (CID) the firm had received from the bureau near the end of October. The CID seeks documents, written reports and answers to interrogatories in connection with the bureau’s investigation into whether prepaid debit card issuers, processors, card networks, service providers to prepaid debit card issuers, or other unnamed persons “have engaged in or are engaging in unlawful acts and practices in connection with the offering, operating or servicing of prepaid debit cards.” UniRush seemed to shoot itself in the foot, according to the bureau’s decision and order. The CFPB’s account of the chronology suggests ...

Republican leadership on the House Financial Services Committee is accusing the CFPB of engaging in a cover up, slamming the agency for deliberately using flawed data that falsely suggests auto dealers are discriminating in the pricing of loans to minority buyers. The Republican staffers on the committee released a number of documents that appear to show the officials at the CFPB not only were aware their data was flawed but also that they discussed how to prevent people outside the agency from discovering it. For instance, a May 2013 draft of a memo to CFPB Director Richard Cordray revealed that bureau staff had “reason to believe that our proxy is less accurate in identifying the race/ethnicity of particular individuals than ...

The more consumers complain to the CFPB about their financial services providers, the more likely those providers are to be fined, and the higher those fines are likely to be, new research suggests. For instance, lenders and other financial services providers face a 58 percent chance of being fined when complaints to the CFPB breach the 2,000 threshold for a company, according to an analysis by PerformLine, a “software-as-a-service” marketing compliance company based in Morristown, NJ. Among the other key findings were a 34 percent increase in the number of consumer complaints year-over-year since 2012, and average fines ranging from $134 million (for companies that received 2,000-10,000 complaints) to $758 million (for companies with 10,000+ complaints). Sliced another way, the ...

Consumers appear to have more to complain about to the CFPB when it comes to their various bank account products and services and less when it comes to money transfers these days. According to the latest analysis by Inside the CFPB of third quarter 2015 information from the bureau’s consumer complaint database, consumer gripes about bank accounts rose 5.4 percent at the nine-month mark in the year versus the same period in 2014. However, consumer kvetching fell by 4.6 percent from the second quarter. Things seem to be much better in the money transfer space, which saw end-user grumblings drop a big 25.4 percent year over year as of the end of September, and down a significant 12.6 percent quarter ...

Do TRID-Related Loan Delays Bolster Warehouse Profits? It Looks That Way. Thanks to loan closing delays caused by the new “TRID” integrated disclosure rule, mortgages are staying on warehouse lines longer, increasing profits for banks that play in that space. David Frase, president of warehouse lending for Southwest Bank, Dallas, told IMFnews, an affiliated email newsletter, that “loans are staying on lines longer so we make more money.” Frase, however, said he expects that, in time, the TRID kinks will be worked out and that loan closing times will become more normalized. Southwest’s specialty entails mini-correspondent or “broker to banker” lines of credit. “Turn times are slower and processing times are longer,” said Frase. According to figures compiled by Inside ...

A growing number of loans are being dropped from commercial MBS deals before they reach securitization, according to Fitch Ratings. While most of the loans dropped had lower balances, under $20 million, the rating service is concerned that the unusually large amount of loan drops over the last 12 months could point to a lack of due diligence by lenders prior to sending the initial loan information to rating agencies or B-piece buyers. For example, in 28 Fitch-rated deals for the 12-month period ending June 30, 2015, about 1,000 loans were dropped, the rating service said. That number represented 30 percent of the final transaction amount. “There is...

Originating nonprime mortgages can be done without repeating the mistakes that contributed to the financial crisis, according to officials at Angel Oak Mortgage Solutions. The firm, one of the most prominent lenders in a severely constrained market, launched in early 2014 and offers nonprime mortgages via wholesale and correspondent channels. Tom Hutchens, a senior vice president of sales and marketing at Angel Oak, said the lender is comfortable extending ...

Investor demand for rated securitizations backed by re-performing and nonperforming mortgages is increasing both in the U.S. and in Europe, according to senior analysts at Moody’s Investors Service. The analysts noted a strong pipeline of RPLs in the U.S. securitization market as investors purchase NPLs and turn them into re-performing loans. Max Saury, a senior analyst with Moody’s Structured Finance Group, estimates the current NPL market at $300 billion, excluding nonperforming non-agency MBS. There have been...

A $56.26 million nonprime mortgage-backed security from Beach Point Capital is scheduled to close next week, according to sources close to the deal. RCO 2015-NQM1 Trust will be backed by mortgages originated by Citadel Loan Servicing, which will also service the loans. The deal will mark the third post-crisis MBS backed by newly originated mortgages, following two MBS from Lone Star Funds’ Colt Funding, including a deal issued last week. Nomura is the placement agent and seller ...