Consumer Financial Protection Bureau (CFPB) Director Richard Cordray appeared in a hearing before the Senate Committee on Banking, Housing and Urban Affairs. This was in conjunction with the release of the CFPB’s semi-annual report.
“As of June 1, 2014, we have received nearly 375,000 consumer complaints on credit reporting, debt collection, money transfers, bank accounts and services, credit cards, mortgages, vehicle loans, payday loans and student loans,” Cordray said in his testimony to the Senate Committee on Banking, Housing and Urban Affairs.
Cordray said that debt collection market continues to be a focus for the CFPB as it’s the source of the most consumer complaints.
Wrongdoers were fined more than $141 million according to Cordray. All of these fines go into the bureau’s Civil Penalty Fund, which can be used to compensate wronged consumers in the form of paying for consumer education and financial literacy programs.
Cordray also noted that the CFPB along with multiple state attorneys general took action against an online loan servicer for illegally collecting money that consumers did not owe.
“We took action against a payday lender for overcharging service members in violation of the Military Lending Act, and robo-signing court documents,” he added. “We took action against an auto lender for discriminatory loan pricing. And we partnered with 49 states in bringing an action against the nation’s largest nonbank mortgage loan servicer for misconduct at every stage of the mortgage servicing process.”
The bureau’s supervisory work contributed to a recent enforcement action against Bank of America that resulted in refunding about $727 million to nearly 2 million consumers. Cordray said this was for illegal practices related to credit card add-on products. “In addition to this public enforcement action, recent nonpublic supervisory actions and self-reported violations have resulted in more than $70 million in remediation for over 775,000 consumers,” he added.
Senate committee members focused most of the hearing on student loan debt. Senator Robert Menendez (D-N.J.) discussed his legislation about providing more transparency during the student loan process by requiring additional disclosures and protections for students and cosigners in the event of student’s severe injury or untimely death. Legislation from Sen. Elizabeth Warren (D-Mass.) that would allow student borrowers to refinance their loans at lower rates was also discussed.
The impact of medical debt on consumers’ credit reports, was also covered briefly before some of the Republican committee members asked Cordray about the bureau’s data gathering.
“As the director is aware, another initiative that is of great concern to me is the CFPB’s big data collection,” said Sen. Mike Crapo (R-Idaho). “In the past, I have asked simple questions regarding the CFPB’s data collection such as how many consumer accounts the CFPB is monitoring and how it intends to use the personal information it collects. Unfortunately, my calls for transparency have been met with ramped up efforts by the bureau.”
Do you think the CFPB is going far enough to protect consumers?
Consumer Financial Protection Bureau. “Semi Annual Report October 1, 2013-March 31, 2014” 12 June 2014. http://files.consumerfinance.gov/f/201405_cfpb_semi-annual-report.pdf
Pyments.com. “CFPB’s Annual Report Card” 12 June 2014. http://www.pymnts.com/in-depth/2014/cfpbs-cordray-3-8-billion-refunded-back-to-consumers-and-counting/#.U5r_yPldU0I