The CFPB rang the credit card industry’s bell last week, compelling JPMorgan Chase to refund at least $50 million to consumers and to pay $136 million in penalties and payments to settle an enforcement action related to allegations of selling bad debt and robo-signing documents. The lender also must pay a $30 million penalty to the Office of the Comptroller of the Currency in a related action. According to CFPB officials and attorneys general from 47 states and the District of Columbia, who collaborated in bringing the action, Chase sold credit card accounts to debt buyers that included amounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible. Debt buyers then sought to collect the faulty ...

The CFPB recently took action against some credit card add-on product vendors – Affinion Group Holdings and its affiliated companies, and Intersections Inc. – accusing the companies of charging consumers for credit card add-on benefits they did not receive. When it comes to Affinion, the CFPB alleges that from about July 2010 through August 2012, the company enrolled consumers in add-on products that claimed to provide consumers with credit monitoring, credit report retrieval, or both. Consumers generally paid between $6.95 and $15.99 per month for these products, which were typically billed directly to their credit cards or deposit accounts. However, the bureau alleges that Affinion or its partner banks billed full product fees to at least 73,000 accounts while failing to provide ...

U.S. military personnel are still having to deal with problems and challenges when they contact student loan servicers to invoke the military rights and protections earned through their service, according to a recently released report from the CFPB. Among the problems cited in the report are continued mistakes handling service members’ student loan repayments, resulting in improper denials of legal benefits, negative credit reporting, and shoddy follow-through on legal protections for military families. Complaints also include frustrations from grieving parents seeking to discharge a co-signed loan following the death of their child. Specifically, the report found that service members continue to report difficulties in obtaining the Servicemembers Civil Relief Act interest rate cap of 6 percent, despite action by federal ...

The CFPB’s latest supervisory report finds illegal mortgage servicing practices are still continuing in at least corners of the marketplace. According to the report, the bureau’s examiners found at least one servicer that sent notices of intent to foreclose to borrowers already approved for trial modifications. “This dual-tracking could mislead consumers to believe the servicer had abandoned the trial modification,” the CFPB said. Bureau examiners also found at least one servicer that, because of a system error, sent notices to borrowers who were current on their loans, saying that foreclosure would be imminent. There are also still problems with illegal runarounds with loss mitigation applications, according to the report. For example, examiners found at least one servicer requesting additional documents ...

The overwhelming majority of private student loan borrowers who apply for a co-signer release were rejected, according to a recent report from the CFPB’s student loan ombudsman. “Many private student lenders advertise options to release a cosigner from a private student loan,” the report began. “However, an analysis of industry responses to the CFPB’s information request found that the lenders and servicers surveyed granted very few releases – of those borrowers that applied for co-signer release, 90 percent were rejected.” The CFPB also said that consumers have little information on the specific borrower criteria needed to obtain a co-signer release. “Consumers reported being confused about their eligibility for obtaining a co-signer release as well as not understanding why they had been ...

A new U.S. Consumer Coalition/Zogby Analytics poll found that a majority of Americans oppose the CFPB’s monitoring of Americans’ credit card purchases. According to the poll, which sponsors claim is the first national survey about the recent operations of the government agency, 55 percent of respondents believe the CFPB’s data collection program is similar or worse than the controversial NSA monitoring program. Further, only 20 percent of those polled believed that the CFPB should be able to collect and review Americans’ credit card statements without their knowledge. The poll also found that the majority of Americans oppose the bureau’s ongoing efforts to restrict access to certain consumer financial products. Nearly 70 percent of those polled said they believed that the ...

CFPB is Investigating Bankrate. Bankrate revealed recently that the CFPB has issued civil investigative demands to the company and certain employees in an effort to seek documents and answer questions relating to Bankrate’s quality control process for its online mortgage interest rate tables. The company has cooperated in responding to the CIDs, Bankrate said in a Form 10-K filing with the Securities and Exchange Commission. “The company received a communication from the CFPB inviting the company to respond to the CFPB’s identified issues in the form of a notice of opportunity to respond and advise during which the CFPB identified potential claims it might bring against the company,” the filing said. Bankrate said it has submitted a response that it ...

Neither of the credit-rating industry’s perennial market leaders – Standard & Poor’s and Moody’s Investors Service – managed to claim a top spot during the first quarter of 2015, according to a new Inside MBS & ABS ranking. Fitch Ratings ranked as the top player in rating the bigger non-mortgage ABS market. The company rated 43 ABS issued during the first quarter that represented 64.2 percent of total issuance by dollar amount. The company rated all eight credit-card ABS issued in early 2015, along with most of the student-loan deals. Fitch raised...[Includes two data tables]

Proposed credit card ABS disclosure requirements from the Securities and Exchange Commission could compromise commercially sensitive proprietary issuer information and prove too burdensome for issuers, according to the Structured Finance Industry Group. The industry group this week unveiled an alternative card ABS format that was endorsed by both its issuer and investor members. The three-part disclosure “would provide more information on more metrics” than either of two options proposed by the SEC. Last year, the SEC adopted...

The CFPB last week promulgated its long-awaited final rule allowing it to supervise larger nonbank auto-finance companies for the first time. Currently, the bureau supervises auto financing at the largest banks and credit unions. The new rule extends that supervision to any nonbank auto-finance company that makes, acquires or refinances 10,000 or more loans or leases in a year. Under the rule, those companies will be considered “larger participants,” and the bureau may oversee their activity to ensure they are complying with federal consumer financial laws. Those laws include the Equal Credit Opportunity Act, the Truth in Lending Act, the Consumer Leasing Act, and the Dodd-Frank Act’s prohibition on unfair, deceptive or abusive acts or practices. The new rule is ...