In the News 06/09/2015

The Consumer Financial Protection Bureau (CFPB) recently conducted a study to measure consumers’ understanding of reverse mortgages. Like many financial options, advertisements and explanations for reverse mortgages found on TV, in print and online depict happy people that are using their extra money to live fuller lives. However, many people do not completely understand what a reverse mortgage is.

A reverse mortgage is a special loan that allows homeowners age 62 or older to borrow against the accrued equity of their homes. According to the CFPB, many people believe a reverse mortgage is a government benefit for senior citizens. However, a reverse mortgage loan must be paid back in full when the borrower dies, moves or no longer lives in their home.

The CFPB study looked at multiple ads and platforms and found that most have incomplete or inaccurate information to describe the loans and that most of the important loan requirements were buried in the fine print, leaving borrowers with the false impression that reverse mortgage loans are risk-free.

Many participants involved with the study did not know that reverse mortgages had to be repaid, that they had attached interest or that they could lose their homes if they did not satisfy the loan requirements.

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In the News 04/07/2015

The Consumer Financial Protection Bureau (CFPB) recently announced that they will be taking action against a nationwide debt collection operation and it’s CEO for threatening consumers with criminal prosecution and jail time for writing bounced checks. National Corrective Group, a privately-held corporation based in California, is also charged with misleading consumers to believe that they were required to enroll in an expensive financial education program to avoid the criminal charges.

The CFPB’s proposed order is currently being reviewed by the federal district court. The order would end all illegal activity, impose a civil penalty of $50,000 and require new regulations on consumer disclosure and strong supervision of the bounced check program.

For more information, check out the following press:

In the News 02/24/2015

DriveTime Automotive Group, Inc. has recently been accused of debt collector harassment and agreed to an $8 million settlement to reconcile charges of violating the Fair Debt Collection Practices Act (FDCPA). The charges brought against the company after an investigation by the Consumer Financial Protection Bureau (CFPB) alleged that they lacked an adequate written policy for their bill collectors, which led to collector harassment, as well as inaccurate reporting of current balance information on accounts, timings of repossessions and dates of first delinquency.

The report issued stated that DriveTime, which has dealerships across the country, had only two employees assigned to handle up to 22,000 disputes each year. Accusations of calling consumers at work and after receiving cease contact requests were also included in the charges.

Read more here:

In the News 02/17/2015

The Consumer Financial Protection Bureau (CFPB), a government agency originally created with the power to oversee, audit and punish banking and collection agencies, continues to address acts which it believes to be harmful to consumers or internal policies that are not sufficient to protect consumers from unfair, deceptive and abusive acts or practices

The Bureau is currently focusing on information access and student lending in early 2015. It recently issued guidelines restricting disclosure of confidential supervisory information, such as documents prepared by or for the CFPB or federal or state government usage and compliance reports. Under these new regulations, supervised financial institutions cannot disclose confidential supervisory information except in specific circumstances.


Other activity includes their partnership with the U.S. Department of Education to issue a $480 million forgiveness of student loans through Corinthian College, Inc.’s Genesis loan program.

This stems from the Bureau’s ongoing lawsuit against Corinthian College, which suggests that the college used false and deceptive advertising to encourage students to take loans and then subsequently use illegal debt collection tactics in an effort to force students into paying the loans back while they were still in school.

Also on the agenda for 2015, the CFPB is targeting credit card company fee structures and extending its supervisory authority. Read more about recent CFPB activity here:

In the News

Consumer protection

The Consumer Financial Protection Bureau (CFPB) is a government-created agency that was created in 2011 and has since been working to regulate and enforce consumer financial protection laws. This agency has taken on major industries, such as credit card companies, mortgage, real estate settlements, debt collection and now—telecommunication.

The CFPB has recently filed an action against Sprint, which has many asking whether this bureau will now be extending its reach into other types of industries. While previously relevant industries sold “consumer financial products and service,” telecom companies simply charge consumers for services. Read more here:

What are your thoughts? Are the parameters of this action within the intent of the Dodd-Frank Act?

Best Business Practices, Part III

Vendor Management Program


Outsourcing is a helpful, often times necessary expenditure of your time and resources.

More accurately, it can equate to a savings of your time and resources.  Depending on the service provided, outsourcing some of your needs can also lead you to the procuring of services that you would not otherwise have available to your in-house staff.

We refer to all of these outsourced service providers as vendors.

It stands to reason that as you and your employees are bound by the standards of the Fair Debt Collections Practices Act and the Consumer Financial Protection Bureau that any company or service provider working for you and given access to your client’s data would be subject to those same regulations.

So, you must build and maintain a Vendor Management Program.

It should contain the following features:

– Your due diligence checklist for determining your vendors’ ability to comply with federal consumer financial laws

– Your policy to request and review the vendors’ policies, procedures, internal controls and training materials

– Copies of contracts with each Vendor, which should contain provisions for clear, enforceable expectations for compliance, including consequences for violations

– Your policy for on-going monitoring of the vendor for the purpose of determining compliance with federal consumer financial law

– Your policy for the timely addressing if problems identified through the monitoring process, including possible termination of the vendor relationship when necessary

A quality vendor management program can be cumbersome to develop and implement at first. However, once running smoothly, a single in-house employee can keep it operational with relative ease. After that, it becomes clear that the gain is worth the work.

An ounce of prevention is worth a pound of cure.

Drop by next week for Better Business Practices, Part IV on skip trace waterfall procedures.