Global Client Solutions, a leading debt-settlement payment processor based in Tulsa, OK, agreed to pay over $6 million in relief to consumers, as well as a $1 million civil penalty, to resolve allegations by the CFPB that the firm helped other companies to collect tens of millions of dollars in illegal upfront fees from consumers. Final settlement is pending federal district court approval. The CFPB accused Global Client Solutions and its two principals, Robert Merrick and Michael Hendrix, of violating the Telemarketing Sales Rule by making it possible for debt-settlement companies to charge consumers illegal upfront fees. The rule prohibits debt-settlement companies from charging consumers advance fees before settling any of their debts. The rule is intended to protect consumers ...

Some industry representatives are worried about maintaining the privacy of consumer personal data in the context of expanding the CFPB’s complaint database with consumer narratives, as the bureau recently proposed. Meanwhile, others fret that financial services companies will be unjustifiably smeared by rumors and false accusations. “[W]e have grave concerns that the CFPB’s public database of complaint information puts consumers’ nonpublic personal information at risk of public discovery,” said the Consumer Mortgage Coalition. “The CFPB now proposes to expand the amount and types of information it will publish, which increases the risk and extent of inappropriate breaches of consumer’s privacy without their knowledge.” In the new age of “Big Data,” concerns about the privacy of consumers’ personal information are heightened ...

The American Bankers Association has weighed in once again on the CFPB’s proposed information collection request filed with the Office of Management and Budget to survey consumers about their experience with debt collection – this time asking it be shut down entirely. In its first comment on an earlier iteration of the bureau’s request, the ABA expressed general support for a consumer survey. However, the industry group identified “significant design and methodological concerns” and suggested changes to the survey instrument and its administration that the banking industry believes will improve the integrity and practical utility of the proposed information collection. Unfortunately, in the revised proposal, the CFPB responds “only perfunctorily to stakeholder comments and reflects very little real change to the ...

A handful of REITs have gained access – or tried to gain access – to the FHLB’s borrowing window through a captive insurance company.

The debt collection industry still has plenty of work to do in terms of correcting its collection attempts against delinquent borrowers, according to a new ranking and analysis by Inside the CFPB. “Incorrect collection attempts” were far and away the leading consumer complaint about the industry submitted to the CFPB, with more than 12,000 such gripes filed, nearly 40 percent of all debt-collection criticisms, the analysis found. (See chart on page 7.) The biggest offender in this regard was Encore Capital Group, with 925 such complaints. MNE Services Inc., on the other hand, had the lowest number of gripes in this area, 19, among the top 50 companies in the ranking. “Communication tactics” ranked second among types of consumer complaints ...

The Consumer Bankers Association took issue with letters CFPB Student Loan Ombudsman Rohit Chopra recently sent to financial institutions that have contractual relationships with colleges and universities, calling for public disclosure of their campus marketing agreements. Chopra’s letter stated the institutions’ failure to be transparent about the terms of these proprietary agreements “may pose potential consumer protection risks.” However, CBA President and CEO Richard Hunt said Chopra did not provide any basis for or evidence to support these provocative claims. “On the contrary, relationships between banks and schools often provide students with great benefits by providing much needed financial literacy, safe and secure debit cards, low or no-fee checking accounts and access to convenient on-campus branches and ATMs; and students ...

Officials from the CFPB jumped into the mortgage compliance weeds during a webinar last week to answer some industry questions about its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as “TRID,” which takes effect in August of next year. Among the questions bureau staff discussed were a handful related to disclosure and re-disclosure timing. For instance, a number of industry representatives asked whether the seven-day waiting period before consummation that applies to loan estimates also applies to revised disclosures. “No, the seven-day waiting period is a Truth in Lending Act statutory waiting period that applies today to the initial TILA disclosures, and after August of next year, to the loan estimate provided after application ...

The CFPB finalized revisions to its international remittance transfer rule, most notably including a five-year extension for a temporary exception that allows insured depository institutions to estimate fees and exchange rates in certain circumstances. The original expiration date for the exception was July 21, 2015. The extension pushes the shelf life of the exception out to July 21, 2020. If the temporary exception were to expire in July 2015, current market conditions would make it impossible for insured institutions to know the exact fees and exchange rates associated with a minority of their remittance transfers, according to the CFPB. “Without the exemption, these insured institutions reported that they would have been unable to send some transfers to certain parts of ...

Flagstar in Talks with CFPB Over Alleged Loss Mitigation Violations. Flagstar Bancorp, the parent of the nation’s 17th largest residential servicer, disclosed in a new regulatory filing that it is in talks with the CFPB over alleged violations of federal law arising from the bank’s loss mitigation practices and default servicing operations dating back to 2011. Flagstar Bank FSB, which owns roughly $69 billion in mortgage servicing rights, said it has already provided the CFPB with documents and “other information” regarding the matter in response to a civil investigative demand. “While the bank intends to vigorously defend against any enforcement action that may be brought, it has commenced discussions with the CFPB staff to determine if a settlement can be ...

CFPB, Other Feds, Issue Guidance on Unfair or Deceptive Credit Practices. In another changing of the regulatory guard, the Federal Reserve is repealing its Regulation AA (unfair or deceptive acts or practices), as per the mandate of the Dodd-Frank Act, reflecting the fact that the CFPB has inherited the Fed’s authority over such practices. At the same time, the Fed joined the CFPB, the Federal Deposit Insurance Corp., the National Credit Union Administration, and Office of the Comptroller of the Currency in issuing joint interagency guidance on the subject. The guidance notes that while the Federal Trade Commission’s credit practices rule remains in effect, the credit practices rules for banks, savings associations, and federal credit unions are being repealed as ...