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This past Monday, the CFPB shared its findings about unethical and non-compliant practices in auto financing in a new edition of Supervisory Highlights. The results highlight how certain lenders misreport information on credit reports, apply loan payments incorrectly, and give misleading disclosures to borrowers. This serves as a reminder to us, compliance leaders, that we need to continuously and thoroughly monitor and test lending and compliance processes. https://lnkd.in/ezmQ2w7m

The Consumer Financial Protection Bureau (CFPB) recently took action targeting an "overdraft loophole" that exempted overdraft loans from lending laws. ? The final rule provides these institutions with three options for charging overdraft fees: Cap their overdraft fee at $5, which is the estimated level at which most banks can cover the costs associated with administering a courtesy overdraft program; Cap their fee at an amount that covers costs and losses, allowing banks to offer overdraft as a convenient service rather than as a profit center; Disclose the terms of their overdraft loan just like other loans, requiring compliance with standard requirements governing other loans, such as credit cards. This includes giving consumers a choice on whether to open the line of overdraft credit, providing account-opening disclosures for comparison shopping, sending periodic statements, and giving consumers a choice of whether to pay automatically or manually. This change is part of the CFPB's increasing regulatory pressure against junk fees and will require financial institutions to immediately evaluate their overdraft programs as they navigate the complexities of the new rule and assess compliance. ? You can read the full article here:

Wow! "The CFPB’s Final Overdraft Rule: The final rule makes several key updates to federal regulation governing overdraft fees for financial institutions with more than $10 billion in assets. These institutions would have to choose one of the following options when charging for overdrafts: ?? Cap their overdraft fee at $5:?Under this simple option, covered banks and credit unions could simply cap their fee at $5, which is the estimated level at which most banks could be able to cover their costs associated with administering a courtesy overdraft program. ?? Cap their fee at an amount that covers costs and losses:?For banks that wish to offer overdraft as a convenient service rather than as a profit center, the final rule allows financial institutions to set their fee at an amount that covers their costs and losses. ?? Disclose the terms of their overdraft loan just like other loans:?For financial institutions that wish to profit from overdraft lending, they may do so by complying with the standard requirements governing other loans, like credit cards. This would include giving consumers a choice on whether to open the line of overdraft credit, providing account-opening disclosures that would allow comparison shopping, sending periodic statements, and giving consumers a choice of whether to pay automatically or manually."

Credit reports play a crucial role in Americans' financial lives, acting as gatekeepers for important economic opportunities such as home purchases, business startups, and car loans. The accuracy of these reports is paramount, as errors can lead to serious consequences like loan denials or higher interest rates. The Fair Credit Reporting Act (FCRA) establishes legal requirements for credit reporting companies, mandating accuracy in their reports, providing consumers access to their information, and allowing them to correct inaccuracies. The Consumer Financial Protection Bureau (CFPB) is actively working to ensure credit reporting companies are held accountable for breaking the law. They have filed an amicus brief to counter TransUnion's arguments that aim to limit their responsibilities under the FCRA. The CFPB's efforts extend beyond this case, including suing Experian for improper handling of consumer disputes, proposing rules to protect sensitive information from data brokers, and taking action against companies failing to maintain accurate reports. Couple of quick questions: 1. Do you think the CFPB's actions will lead to stricter compliance requirements for credit reporting companies overall? 2. Also, how might these developments impact consumer trust in the industry? #CFPB #credit #experian https://lnkd.in/e3NiDP_P.

Last week the CFPB finalized a rule that requires banks and credit unions with more than $10B in assets to either cap overdraft fees to $5, charge a fee that covers no more than their costs and losses, or choose to disclose the terms of overdraft loans. We have yet to see if the rule survives challenges but… how are banking leaders who prioritize #financialwellness thinking about this? https://lnkd.in/gpw9C7k3

In 2024, the Consumer Financial Protection Bureau has already issued 18 interpretations, rules, and enforcement actions that will aid private consumer litigation. A new NCLC Digital Library article explains these actions, which involve?contracts for deed, mortgage and student loan servicing, credit reporting, new forms of credit, debt collection, auto financing, banking, remittances, credit cards, digital shopping, appraisals, unenforceable contract terms, and more.?#DigitalLibrary #ConsumerLaw #ProtectConsumers

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Exciting News - Simonich Financial, Inc. has been awarded our California Financing Law (CFL) License, and launches SiFi Lending. Read the full press release to learn more about SiFi Lending. ?? https://lnkd.in/gQZh792D #SimonichFinancial #CFL #LendingSolutions #FinanceNews #BusinessGrowth

The Consumer Financial Protection Bureau has taken significant enforcement actions against TD Bank and Navient, two major financial institutions. TD Bank was ordered to pay $7.76 million to its harmed customers and a $20 million penalty for illegally tarnishing credit reports. Navient, formerly known as Sallie Mae, was ordered to pay $100 million to harmed borrowers and is banned from ever servicing student loans again. These actions underscore the importance of the CFPB's role in ensuring fairness in the financial sector. The recent survey commissioned by Americans for Financial Reform and CRL shows that voters of all political affiliations support the CFPB's crack down on junk fees, discrimination, and other harmful actions from financial firms. The survey also reveals that consumers are in favor of limiting the price banks can charge for overdraft fees, capping credit card late fees, and government regulators capping credit card late fees at $8 per month. What are your thoughts on the CFPB's role in protecting consumers' financial interests? Do you believe these enforcement actions will have a positive impact on the financial sector?

#CreditReportingExpertWitness #expertwitness A district judge in Florida admitted the opinions of a credit reporting expert witness after ruling that his opinions were an application of industry standards to facts that, if proven, might have helped demonstrate the satisfaction of Fair Credit Reporting Act standards by implication. This case involves Garcia’s disagreement with Synovus’ decision to charge off Garcia’s account with Synovus; Garcia’s disputes as to the accuracy of such charge offs as reflected on his credit reports; and Synovus’ proper investigation and verification that, in fact, Garcia’s subject personal account was charged off. Defendant Synovus Bank's expert John Ulzheimer offered three general opinions in his expert report: Firstly, consumers can default on loans even if they've never missed a payment. As such, reporting a charged off loan to a credit reporting agency as a 'charge off' does not constitute incorrect information. Secondly, the Bank's investigation responses to Garcia's credit reporting disputes regarding the subject account were appropriate and in line with industry standards and practices; and Garcia did not experience the credit related damages as alleged. Garcia argued that each of these opinions were impermissible for various reasons and hence outside the scope of Federal Rule of Evidence 702. The Court denied Garcia's Motion to Exclude the Opinions of John Ulzheimer. https://lnkd.in/gmjCkcgE