WASHINGTON (5/23/14)--A new report, issued Thursday by the Consumer Financial Protection Bureau, highlights what the bureau labeled as illegal actions that were uncovered by the bureau's new supervision of the payday, debt collection and consumer reporting markets.
"For the first time at the federal level, nonbank financial institutions are subject to supervisory oversight that holds them accountable for how they treat consumers," said CFPB Director Richard Cordray, unveiling the report.
"The CFPB's oversight of banks and nonbanks alike is exposing risky practices and getting results for consumers. We are pleased that our supervision program has been able to return more than $70 million to consumers in recent months," Cordray added. The CFPB gained supervisory authority over the nonbank entities under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The new report generally covers supervisory activities between November 2013 and February 2014. In the three nonbank markets highlighted, examiners found that many companies had "systemic flaws" in their compliance management systems, such as consistently failing to have a system in place to track and resolve consumer complaints.
In the payday lending area, the CFPB report found:
In the debt collection market, the CFPB reported:
The bureau said it also discovered problems at consumer reporting agencies--including companies that are popularly called credit bureaus or credit reporting companies. The CFPB said its examiners found certain agencies did not handle consumer credit report dispute documents correctly and that some agencies were encouraging consumers to file disputes online or by telephone, but then refused to accept such disputes from some consumers.
Where CFPB examiners find problems, the bureau said in a release, they alert the company to their concerns and outline necessary remedial measures. When appropriate, the CFPB opens investigations for potential enforcement actions.
Use the resource link for more detail on the CFPB report findings.