Consumer complaints about their student loan debt obligations rose slightly at the six-month mark, up 4.8 percent versus the previous year, according to a new analysis by Inside the CFPB. Month over month, gripes were down 4.0 percent. There was a good bit of variation in the numbers, company to company, during both time periods. But there was also a good bit of consistency within individual companies, with six of the top 10 rising or falling according to both metrics. For instance, top-ranked Navient saw consumer criticisms fall 6.8 percent quarter over quarter and 14.8 percent at the mid-year point compared with last year. Meanwhile, at second-ranked Genesis Lending, consumer complaints spiked 29.9 percent QOQ and skyrocketed more than 1,000 ...

Subsequent to the publication deadline for the previous issue of Inside the CFPB, American Honda Finance Corp. submitted a statement in response to the enforcement action brought against it late last month by the CFPB and the Department of Justice.“AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well,” said the lender. “We firmly believe that our lending practices have been fair and transparent. “AHFC has a difference of opinion with the CFPB and the DOJ regarding the methodology used to make determinations about lending practices, but we nonetheless share a fundamental agreement in the importance of fair lending,” the company added.In cooperation with the CFPB and the DOJ, AHFC...

CFPB Sends Questionnaire to Debt Collection Entities. The CFPB recently sent a questionnaire to a variety of debt collection firms, creditors and service providers in an effort to help the bureau “better understand operational costs and other factors associated with debt collection.” Noting that participation is voluntary, the consumer regulator said industry responses “will inform the bureau’s analysis of the costs and benefits of potential new rules related to debt collection.” The questionnaire asks about basic activities and operational costs of collecting debt, including, for example, questions about vendors used for activities such as dialers or print mailings, maintaining data about consumer accounts, and furnishing information to credit bureaus. “After we have received the questionnaire responses, we plan to reach ...

The CFPB last week ordered Citibank and its subsidiaries to provide an estimated $700 million in relief to eligible consumers harmed by allegedly illegal practices related to credit card add-on products and services. Citibank and its subsidiaries also will pay $35 million in civil money penalties to the CFPB. Roughly 7 million consumer accounts were affected by Citibank’s deceptive marketing, billing, and administration of debt protection and credit monitoring add-on products, said the bureau. A Citibank subsidiary also deceptively charged expedited payment fees to nearly 1.8 million consumer accounts during collection calls. More specifically, the bureau’s allegations of deceptive marketing include charges that Citi misrepresented the cost and fees for coverage, misrepresented the benefits of some products, used illegal practices ...

The CFPB last week brought an $18.5 million enforcement action against Discover Bank and its student loan affiliates for engaging in allegedly illegal private student loan servicing practices. The bureau’s enforcement action “demonstrates how Discover failed at providing the most basic functions of adequate student loan servicing for a portion of the loans that were transferred from Citibank,” said the bureau. Thousands of consumers encountered problems as soon as their loans became due and Discover gave them account statements that overstated their minimum payment, the CFPB said. Also, “Discover denied consumers information that they would have needed to obtain tax benefits and called consumers’ mobile phones at inappropriate times to contact them about their debts.” The CFPB concluded that the ...

The CFPB and the Department of Justice resolved a $24 million enforcement action against American Honda Finance Corp. last week with a settlement that will put new measures in place to address discretionary auto loan pricing and compensation practices. The joint CFPB/DOJ investigation concluded that Honda’s policies resulted in minority borrowers paying higher dealer markups. “Honda violated the Equal Credit Opportunity Act by charging African-American, Hispanic, and Asian and Pacific Islander borrowers higher dealer markups for their auto loans than non-Hispanic white borrowers,” said the bureau. “These markups were without regard to the creditworthiness of the borrowers.” Honda’s policies also injured thousands of minority borrowers, according to the CFPB. “Honda’s discriminatory pricing and compensation structure meant thousands of minority borrowers ...

The CFPB has filed a complaint and a proposed $5.2 million consent order in federal court against Sacramento, CA-based Student Financial Aid Services for allegedly illegal sales and billing practices.The company has operated websites and related call centers where it offers fee-based assistance to consumers filling out the federal government’s Free Application for Federal Student Aid. According to the CFPB’s complaint, when consumers entered their payment information for certain financial advisory services, SFAS began to bill them for an annual subscription without their knowledge or consent. These recurring charges typically ranged from $67 to $85 each year and were renewed annually, according to the bureau. The company enrolled consumers in these annual subscriptions without adequate disclosures and imposed recurring ...

The CFPB recently won some and lost some when it comes to the debt-collection arguments it advanced in CFPB v. Frederick J. Hanna & Associates, which the bureau initiated in July 2014. According to the CFPB’s complaint, the firm and its three principal partners – Frederick Hanna, Joseph Cooling and Robert Winter – ran a debt-collection lawsuit mill that used illegal tactics to intimidate consumers into paying debts they may not have owed. Between 2009 and 2013, the firm filed more than 350,000 debt-collection lawsuits in Georgia alone, but the attorneys only spent less than a minute reviewing each suit, according to the CFPB. In its motion to dismiss, Hanna & Associates argued that the claims brought by the CFPB focus only...

The CFPB recently launched the first in a new series of monthly reports to highlight key trends from consumer complaints submitted to the bureau, including data on company performance, complaint volume, state and local information, and product trends. The first installment in the series focuses on debt-collection complaints and complaints from consumers in Milwaukee. The bureau said it expects companies to respond to complaints within 15 days and to describe the steps they have taken or plan to take to resolve the complaint. “The CFPB expects companies to close all but the most complicated complaints within 60 days,” it said. “Complaints inform the bureau’s work and help to identify issues in the market, which feed into the bureau’s supervision and ...

New issuance of non-mortgage ABS increased in most major product categories during the second quarter of 2015, although a slowdown in floorplan deals dampened the party slightly. The ABS market generated $54.15 billion in new issuance during the second quarter, a gain of 5.8 percent from the first three months of 2015. It was the strongest new issuance figure since the financial market meltdown, with the previous high ($54.22 billion) coming in the third quarter of 2007. ABS issuance has climbed...[Includes two data tables]