In February, the CFPB released its 21st Supervisory Highlights Report. This report covered findings identified in examinations conducted by the CFPB between April 2019 and August 2019. Areas included in the report include mortgage servicing, payday lending (including general Regulation Z requirements), debt collection, and student loan servicing.
Mortgage Servicing Highlights
- Regulation X violations discussed in the report include failing to provide required loss mitigation notices, providing incomplete notices, or not providing notices within the time required by the regulation. While the violations were, in part, caused by increased applications due to natural disasters, the CFPB still expects institutions to comply with the requirements of Regulation X.
- The CFPB identified violations in the timing requirements for providing an acknowledgement of a loss mitigation application, as well as written notification showing what, if any, loss mitigation options are available.
Payday Lending Highlights
The violations under Regulation Z, Regulation B, and unfair acts or practices detailed below apply to more areas than payday lending.
- Some payday lenders failed to apply payments to borrowers’ loans, thus overcharging the borrowers for unapplied payments.
- When systems were down, some lenders required staff to calculate the annual percentage rates applicable to loans. Because of errors in calculating the term of the loans the APRs were sometimes misstated to borrowers.
- Some lenders were not including certain fees when disclosing the finance charge on a loan.
- In some cases, lenders were unable to prove compliance with Regulation Z because they did not retain evidence for two years. While payment histories and loan data may have been retained on computer systems, other loan origination documentation was not consistently maintained, and evidence of Truth-in-Lending compliance could not be determined.
- When providing adverse action notices per Regulation B, some lenders did not include the specific reason(s) that the action was taken.
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