1) The Consumer Financial Protection Bureau (CFPB) recently issued a report highlighting problems such as unfair and deceptive practices in the mortgage servicing market uncovered through the Bureau’s supervision program in 2013.
Mortgage servicing practices that harm consumers are a key priority and the CFPB is ready to take action. These issues come about under the backdrop of detailed mortgage servicing protections under new rules effective January 10, 2014.
The CFPB expects servicers to “clean up their act and provide responsible customer service”.
The report describes several instances where servicers violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s (Dodd-Frank Act) ban on unfair, abusive or deceptive acts and practices such as:
- unfair practices with servicing transfers;
- waiving consumer rights;
- poor payment processing;
- failing to provide correct information to consumer reporting agencies.
In this reporting period, non-public supervisory actions and self-reported violations resulted in $2.6 million in remediation to consumers.
Is your institution complying with the recently revised servicing rules to avoid financial penalties?
We can help you by reviewing your compliance program to determine if meets the parameters under the new guidelines.
(*NOTE: Sen. Elizabeth Warren, D-Mass., and Rep. Elijah Cummings, D-Md., are calling on the Federal Reserve Board to take a more active role in enforcement actions. The lawmakers think that some enforcement actions, such as a recent settlement with mortgage servicers, have been too lenient.)
2) Moebs Services (moebs.com), a research firm, announced this year that 41% of banks will not offer completely free checking, an increase of 8 percentage points since last year.
This change in course is most likely due to increasing compliance costs and new rules that make it more difficult to collect fees from debit card transactions. Nevertheless, many institutions advertise that they offer free checking, when in fact, regulators frequently discover that these accounts are not truly free – usually due to a misunderstanding or misinterpretation of the rules.
Don’t get caught in the position of a regulator finding that your institution, knowingly or unknowingly, is generating deceptive marketing.
Our team can review the terms of your products to ensure that they are not in violation of the regulations that cover these products.