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Tuesday, March 8, 2016

CFPB Supervision of Banks and Nonbanks Recovers $14.3 Million for Consumers

The CFPB released its latest supervision report where the exams of banks and nonbanks resulted in the remediation of $14.3 million to approximately 228,000 consumers. In its examinations covering the last months of 2015, the Bureau found violations in the student loan market, including illegal automatic defaults by student loan servicers and illegal garnishment threats by debt collectors performing services for the Department of Education. Examiners also found instances of international money transfer companies violating the CFPB’s new remittance rule, banks providing inaccurate information to credit reporting companies about customer checking accounts and debt collectors illegally contacting consumers.

CFPB Director Richard Cordray said:
It is deeply concerning that our examiners found private student loan borrowers being hit with automatic defaults when their co-borrower goes bankrupt. The problems plaguing the student loan market can have a domino effect on borrowers’ financial futures. The CFPB has made it a priority to police this market so that borrowers are not treated unfairly or illegally dead-ended into default.

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