Yesterday, the Consumer Financial Protection Bureau issued its Fall 2012 Supervisory Report discussing the degree to which financial institutions and service providers it regulates are complying with federal consumer financial laws. Part III of the report surveys significant legal violations detected by the CFPB and what the agency is doing to remedy those violatons and deter future violations. The agency's press release accompanying the report highlighted these problems:
- Credit Cards: Bureau examiners found instances where the credit limit of a consumer who was under 21, but whose account was associated with a consumer 21 or older, was raised without consent of the co-applicant. The Bureau found that these violations typically occurred when an institution did not have proper procedures in place to ensure that credit line increase requests are sent to the co-applicant for approval.
- Reporting to Credit Bureaus: The Bureau found that not all relevant employees at supervised institutions had sufficient training to comply with fair credit reporting requirements, which sometimes resulted in inaccurate information about consumer’s accounts being reported to credit bureaus. Inaccurate information in a consumer’s credit record may cause a consumer to pay more for credit than would otherwise be the case or be unjustifiably denied credit altogether.
- Mortgages: The CFPB found violations of federal consumer financial law by financial institutions. These violations include failure to provide borrowers with clear and timely disclosures regarding the nature and costs of the real estate settlement process, such as through inaccurate Good Faith Estimates or HUD-1 forms. Violations also included failure to provide accurate disclosures of interest rates, payment amounts, and payment schedules.
Jenna Greene at the National Law Journal has penned this article on the CFPB's report.