Acting Director David Uejio issues warning: CFPB will take aggressive action on COVID-19
On January 28, 2021, Acting Director David Uejio of the Consumer Financial Protection Bureau (CFPB) confirmed the CFPB’s new aggressive approach to enforcement of COVID-19 issues. Uejio’s statement, published as Blog, addresses several areas of concern uncovered in last year’s priority assessments, including:
- Mortgage agents providing inaccurate information on forbearances from the CARES Act, failing to process forbearance requests and collecting late fees from borrowers subject to forbearance;
- Auto loan managers withdrawing money from consumer accounts off-line; and
- Consumer credit information providers do not accurately report information that complies with the Fair Credit Reporting Act (FCRA) as amended by the CARES Act.
It is clear that the tone of the CFPB has already evolved from last years more flexible approach to the application of a more urgent and less lenient approach. Uejio warns that the Monitoring, Enforcement and Equitable Loans (SEFL) Division will expedite enforcement investigations relating to COVID-19 “to ensure the industry understands the message that the breach during this period of need will not be tolerated. ” In addition to issues related to COVID-19, Uejio has identified racial equity as a top priority for the CFPB. The CFPB’s focus on racial equity is in line with government priorities, as the Biden administration has underscored the pressing need to mitigate the economic impact of the COVID-19 crisis and simultaneously address it. racial equity.
Uejio’s statement puts all providers of consumer credit information, including mortgage managers and students, aware of increased CFPB action. While historically civil lawsuits under the FCRA far outnumber agency actions, the CFPB may be preparing to crack down on FCRA reporting violations. Under the FCRA as amended by the CARES Act, suppliers who perform accommodation for a consumer due to COVID-19 are required to do the following:
- If the account was up to date before hosting, report the account as “current”; and
- If the account was overdue prior to accommodation, (1) maintain delinquent status during the accommodation period, and (2) update the status to current if the consumer updates the account during the hosting period.
Previously, the CFPB issued guidelines indicating a flexible approach to supplier deadlines for investigating consumer disputes during the COVID-19 pandemic. However, with the transition to a new management of CFPB, suppliers must ensure that they strictly adhere to the 30-day investigation window prescribed by the FCRA.
The regulatory landscape for consumer credit is changing rapidly. In fact, statements by Acting Director Uejio indicate that changes at CFPB will not wait for a confirmed Director. Industry participants should take this time to assess their risks, especially with regard to COVID-19. Like us previously discussed, mortgage managers and others subject to priority assessments should carefully review any findings they have received in addition to monitoring highlights. As always, we will continue to monitor issues raised by the CFPB and other regulators to identify priority areas of concern.