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Thursday, May 22, 2014

CFPB Highlights Risky Practices In Nonbanks

The CFPB issued a report highlighting illegal actions of the payday, debt collection and consumer reporting markets. The Dodd-Frank Act gives the CFPB the authority to supervise certain nonbanks, including mortgage companies, private student lenders, payday lenders and other large nonbank participants. CFPB Director Richard Cordray noted:

For the first time at the federal level, nonbank financial institutions are subject to supervisory oversight that holds them accountable for how they treat consumers.

Overall, CFPB Supervision activities have returned more than $70 million to consumers.

Some illegal practices highlighted by the report include:

  • Payday lenders, or third-party collectors hired by payday lenders, deceiving customers, illegally harassing borrowers and visiting consumers at work;
  • Debt collectors intentionally and illegally misleading consumers about litigation, making excessive, illegal calls to consumers and failing to investigate consumer credit report disputes; and
  • Consumer reporting agencies not properly handling consumer credit report dispute documents.

Read the Supervisory Highlights.

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