The CFPB, the Federal Trade Commission and 15 state attorneys general, as well as other state agencies, announced a number of legal actions last month against alleged foreclosure relief scammers they accused of using deceptive marketing tactics to rip off distressed homeowners across the country. The CFPB filed three lawsuits against companies and individuals it asserted collected more than $25 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages. The bureau is seeking compensation for victims, civil fines and injunctions against the companies and individuals it identified. One of the lawsuits was filed against Clausen & Cobb Management Company, Inc., its owners, Alfred Clausen and Joshua Cobb, and their business associate, attorney ...

The CFPB and 13 state attorneys general obtained approximately $92 million in debt relief from Colfax Capital Corp. and Culver Capital LLC, also collectively known as “Rome Finance,” for about 17,000 U.S. service members and other consumers said to be harmed by the company’s alleged predatory lending scheme. According to the government agencies, Rome Finance lured consumers with the promise of no money down and instant financing. Rome Finance then masked expensive finance charges by artificially inflating the disclosed price of the consumer goods being sold. Rome Finance also allegedly withheld information on billing statements and illegally collected on loans that were void. The CFPB said the companies offered credit to consumers purchasing computers, videogame consoles, televisions, or other products. ...

The CFPB and 25 states filed amicus briefs in a case pending before the Supreme Court of the United States, Jesinoski v. Countrywide Home Loans Inc., that could resolve a circuit split over the recession of a mortgage under the Truth in Lending Act. The Truth in Lending Act provides that a borrower “shall have the right to rescind the transaction until midnight of the third business day following ... the delivery of the information and rescission forms required under this section ... by notifying the creditor ... of his intention to do so.” TILA further creates a time limit for the exercise of this right, providing that the borrower’s “right of rescission shall expire three years after the date ...

In what is likely the first such case of its kind, a law firm headed up by former Ohio Attorney General Marc Dann, D, brought suit last month in the Eastern Division of the U.S. Northern District Court of Ohio against JPMorgan Chase, alleging the lender violated the new mortgage servicing regulation promulgated by the CFPB. According to court documents, homeowner Bethanne Wasko, of Poland, OH, was always current on her mortgage until she sought a loan modification and was told by Chase that she would need to stop making payments in order to be eligible. Wasko did as she was told, her attorney’s filing said, but instead of offering her the modification she sought, the bank filed for foreclosure. ...

The American Bankers Association told the CFPB its members are working hard to refine their implementation of the bureau’s new mortgage servicing rules, but have bumped into a handful of questions and concerns they’d like the agency to address via regulatory guidance or amendment. The first issue involved rolling delinquencies and the “120-day rule.” The bureau’s rule prohibits a servicer from making the first notice or filing for foreclosure unless a borrower’s mortgage loan obligation is more than 120 days delinquent. Many ABA members asked how this 120-day rule applies to “rolling delinquencies,” which occur when delinquent borrowers resume making payments on the loan without making up for past missed payments. “ABA members need regulatory certainty regarding how to apply ...

The Government Accountability Office will put the CFPB’s organizational culture and management practices under its microscope in response to a request from Rep. Patrick McHenry, R-NC, chairman of the House Financial Services Subcommittee on Oversight and Investigations, and two other members of the full committee’s GOP leadership. McHenry and his Republican allies on the subcommittee have been trying to hold the CFPB’s feet to the fire for months over allegations that bureau managers are discriminating against employees based on race and gender and retaliating against employees who complain. McHenry announced the GAO probe during a hearing last week, at which he also provided an updated total of the number of CFPB employees who have alleged discrimination and/or retaliation at the ...

House Financial Services Committee Chairman Jeb Hensarling, R-TX, has written CFPB Director Richard Cordray to assert that the recent Supreme Court decision in National Labor Relations Board vs. Noel Canning raises questions about the validity of the actions Cordray took prior to his July 16, 2013, confirmation by the Senate. The congressman also said he is seeking “a complete and proper accounting of the CFPB’s exposure to legal challenges.” The correspondence to Cordray was also signed by Senate Banking, Housing and Urban Affairs Ranking Member Mike Crapo, R-ID. In the Canning case, the Supreme Court of the United States held that President Barack Obama’s appointment of directors to the NLRB violated the Recess Appointment Clause of the U.S. Constitution. Although ...

The CFPB recently began accepting consumer complaints about prepaid cards (such as gift cards, benefit cards, and general purpose reloadable cards) as well as additional nonbank products, including debt settlement services, credit repair services, and pawn and title loans. Consumers can now submit prepaid card complaints to the bureau about problems managing, opening or closing their account; overdraft issues and incorrect or unexpected fees; and frauds, scams or unauthorized transactions. They can also file gripes about prepaid card advertising, disclosures and marketing practices; as well as issues relating to adding money and savings or rewards features associated with such cards. In the coming months, the bureau plans to issue a proposed rule aimed at increasing federal consumer protections for general ...

The Mortgage Bankers Association, in a bit of a surprise move, is pressing the CFPB, the Conference of State Bank Supervisors and members of Congress for changes to the Secure and Fair Enforcement of Licensing Act and other regulations that would provide uniform testing standards for all mortgage loan officers. The development is somewhat unexpected in that the trade group is calling for regulators and lawmakers to increase the compliance load for its members. Under the SAFE Act, there are two regimes for loan officers. Loan officers who work for nonbank lenders have to be licensed. That includes testing, pre-licensing and continuing education requirements, as well as extensive criminal and financial background reviews by state regulators. Additionally, they also must ...

The Government Accountability Office has found that “opportunity exists” for the CFPB to improve the transparency of its civil penalty fund activities. On the positive side of the equation, the bureau has implemented a number of internal controls for managing the Consumer Financial Civil Penalty Fund. The CFPB has also implemented controls for tracking the collection of penalty funds, determining the allocation amount to classes of eligible victims, and monitoring the third-party vendors that distribute the funds, GAO found. In addition, the bureau has written policies that describe roles and the process related to making allocations to consumer education and financial literacy programs. “However, according to officials, the CFPB did not document the factors the fund administrator considered in determining ...