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Thursday, March 12, 2015

CFPB Report Documents Exam Issues

The Consumer Financial Protection Bureau yesterday issued a “Supervisory Highlights” report that outlined several areas of concern its examiners have found related to deposits, mortgage origination, fair lending, consumer reporting and debt collection.

The report noted that some institutions had changed the way they assess overdraft fees, such as by switching from a ledger-balance to an available-balance method, but did not sufficiently disclose these changes. Because the changes increased the likelihood that consumers would incur fees, the practices were deemed unfair or deceptive.

Examiners also found instances of weak compliance management systems, including inadequate board and employee training; social media advertisements by loan originators that failed to include required disclosures; and fair lending violations stemming from automatic denials of applicants that rely on non-employment income, such as Social Security.

Other issues flagged relate to improper mortgage loan originator compensation, delayed delivery of good faith estimates and insufficient or untimely adverse action notices, among other things.

Read the report.