Supervisory actions by the Consumer Financial Protection Bureau (CFPB) recovered $107 million in relief for more than 238,000 consumers, according to the Bureau’s latest supervision report outlining illegal practices the Bureau’s examiners uncovered during the three-month period, according to an announcement from the CFPB on Tuesday.
“Our supervisory activities in the past few months have returned $107 million to hundreds of thousands of harmed consumers,” CFPB Director Richard Cordray said. “Borrowers should not be mistreated when trying to repay their loans. We will continue to shine light on the problems we observe in areas such as servicing, consumer reporting, and debt collection, and hold companies accountable when they do not treat borrowers fairly.”
Among the findings in the report were that mortgage servicers failed to automatically terminate mortgage insurance and reimburse consumers. Examiners found that more than one mortgage servicer was in violation of the Homeowners Protection Act when they failed to automatically terminate private mortgage insurance for borrowers who were eligible to have such insurance automatically terminated. Under the Homeowners Protection Act, borrowers are eligible to have private mortgage insurance automatically terminated (and servicers are required to terminate the insurance) when the principal balance of the loan is scheduled to reach 78 percent of the original value of the property, according to the CFPB.
“We will continue to shine light on the problems we observe in areas such as servicing, consumer reporting, and debt collection, and hold companies accountable when they do not treat borrowers fairly.”
The CFPB has authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to supervise banks and credit unions with assets totaling more than $10 billion, along with certain nonbanks that include mortgage companies, payday lenders, private student lenders, and other nonbanks the CFPB has determined to be “large participants” in the financial market.
The report issued Tuesday was the ninth edition of Supervisory Highlights. The problems the CFPB finds during supervisory examinations are often resolved without enforcement action non-publicly. Such actions have occurred recently in the areas of mortgage servicing, mortgage origination, deposits, and credit cards. From May 2015 to August 2015, such actions resulted in $107 million in restitution to more than 238,000 consumers.
To view the Supervisory Highlights report issued Tuesday, click here.