Saturday, January 31, 2015

CFPB: A Summary of the CFPB’s Annual Report to the Committees on Appropriations


On December 31st, the CFPB issued its annual report to the Committees on Appropriations of the United States Senate and House of Representatives.  The Report highlights the activities of the CFPB from October 1, 2013 through September 30, 2014, its fiscal year.  The full text of the Report can be found here:
The Report, including appendices, is 176 pages long.  Here are the highlights in 700 words or less.
Highlights from the Report include the following:
·       In the 2014 fiscal year, the CFPB employed 1,443 employees;
·      The CFPB incurred approximately $498 million in obligations, including $237 million which was spent on employee salaries and benefits;
·       In the 2014 fiscal year, the CFPB collected over $77 million in civil
      penalties;
·       In the 2014 fiscal year, the CFPB received approximately 240,600 complaints.  Of those, 36% related to collections and 21% related to mortgages;
·       The CFPB identified certain areas for future rule making, including reloadable prepaid cards, debt collection, small dollar credit, overdraft protection;
·       During the 2014 Fiscal Year, the CFPN was a party to 41 public enforcement actions, several of which were joint ventures with other agencies of state attorney generals; and
·       Of those actions, about half were resolved with pre-suit consent 
      orders.
 
Complaints.
The Report also offers insights as to how complaints received through the complaint portals are handled.  Complaints are initially screened by several criteria, including whether they are within the CFPB’s primary enforcement authority and whether the complaint is complete.   Screened complaints are then forwarded to the appropriate company.  The company then reviews the complaint and responds to the consumer and the CFPB.  After receiving the company’s response, the CFPB then requests further feedback from the consumer.  After receiving the consumer’s feedback, the CFPB reviews the consumer feedback, as well as other information, including the timeliness of the company’s response, to prioritize complaints for investigation.  The Report indicates that with regard to the majority of complaints addressed by companies, the consumer accepted the company’s response without further dispute.  Report of the CFPB Pursuant to 1017(E)(4) of the Dodd-Frank Act, p. 76.
As noted above, 36% of the complaints received by the CFPB related to debt collection.  Of those complaints, the leading causes of concern were continued attempts to collect debt not owed and communication tactics. The CFPB noted that with respect to the attempts to collect debt not owed, “the attempt to collect the debt is not itself the problem; rather, consumer argue that the calculation of the underlying debt is inaccurate or unfair.”  Id., p. 48.  As to communication tactics, the most common complaint noted is when a consumer gets a call about another person’s debt.  Id. at p. 49.
Regarding mortgage complaints, the overwhelming majority of complaints concern problems when unable to pay and complaints concerning making payments.  Id. at p. 50.  The issues within those categories are widespread and include complaints about loan modifications, collection and foreclosures. 
Enforcement Actions.
The CFPB was a party to 41 public enforcement actions.  Approximately half of those, were resolved prior to suit through consent orders.  Of those public enforcement actions, almost half involved real estate related issues.

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