As mentioned in last week’s post, the CFPB has taken a particularly aggressive stance over the past year. Historically, this would signal heavier regulation and scrutiny for financial institutions. But recent blogs and data posted by the CFPB suggest that they will be more creatively aggressive and may seek to expand the list of companies overseen. Here are 3 recent, notable examples:
1. Jan. 26, 2022: A Request for Information (RFI) regarding fees imposed by providers of consumer financial products or services is released (more information available here). Section I refers to common junk fees from resort fees added to hotel bills and service fees added to concert ticket prices. This raises a question – is the CFPB suggesting they will start expanding their jurisdiction to hotels and concert venues? What other areas might be explored?
2. Jan. 31, 2022: The CFPB published a review on the financial issues regarding the criminal justice system. Referring to this report, CFPB Director Chopra alluded to how private companies leverage a lack of choice and market dominance to impose exorbitant fees on incarcerated individuals and their families. It is the CFPB’s first study of the criminal justice financial ecosystem; it may not be the last.
3. Feb. 4, 2022: Patrice Ficklin posts to the CFPB blog regarded discrimination in the appraisal process. The post indicated that home valuation may be skewed by a person’s skin color or the demographics of the surrounding market. This angle on racial inequities and biases has received a fair amount of attention recently, and one might expect the CFPB to continue to pursue this additional theory further.
What does this mean for mortgage companies? As Director Chopra is known for in his past[1], we can expect the CFPB will continue to use all its tools and authorities available to find ways to tackle issues that are burdensome or harmful to consumers. We will see heavy fines across the board if companies are not staying alert. Having strong, reliable compliance expertise will become even more essential.
Firstline Compliance specializes in helping protect you and your company by staying in front of compliance rules and regulations and navigating the journey with you. Contact us at (831) 325-3369 or info@firstlinecompliance.com with questions and comments.
[1] Chopra’s prepared remarks as Commissioner of FTC from 1/11/21 clearly indicate his beliefs that federal regulators (FTC in particular) should use and reinstate additional enforcement authority, such as Penalty Offense Authority, Section 18 Rulemaking, largely focused on unfair or deceptive practices, Administrative Litigation, and partnering with law enforcement. https://www.ftc.gov/system/files/documents/public_statements/1589068/20210413_remarks_of_commissioner_chopra_at_tina.pdf
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