Big Fines for Abusive Debt Collection

Today, the Consumer Financial Protection Bureau (CFPB) announced enforcement actions against Encore Capital Group and Portfolio Recovery Associates, the two largest debt buyers active in the United States. According to the Bureau, Encore will pay up to $42 million in refunds to affected consumers, a $10 million fine and cease collection on $125 million in debts. Portfolio will pay $19 million in consumer refunds, a $8 million fine and cease collection on over $3 million in debts. The CFPB documented the companies buying debts that were potentially inaccurate, lacking documentation or

Federal Housing Administration’s Proposal Falls Short, Hits Borrowers Coming and Going

The Federal Housing Administration's mutual mortgage insurance fund plays a critical role in providing access to credit so that millions of Americans—many of whom are first-time buyers, come from low- and moderate-income backgrounds, or purchase homes in communities of color—can be successful homeowners. The FHA today proposed revised language on the lender certification of loan and borrower eligibility and lender disbarment. Mike Calhoun, CRL president, commented: The housing market needs to provide consumers with affordable, well-underwritten home loans, ensure the fiscal strength of the

Federal Housing Finance Agency's Rule Setting Affordable Housing Goals

Today, the Federal Housing Finance Agency (FHFA) issued a final rule setting affordable housing goals for Fannie Mae and Freddie Mac (the GSEs). Affordable housing goals are meant to ensure that people in lower-wealth communities have access to homeownership and affordable rental housing. [1] FHFA announced that its single-family, low-income home purchase goal for 2015-2017 would be set at a conservative 24 percent, and that the dual-part market and benchmark test that determines if goals are met would remain unchanged. This allows the GSEs to meet the goal even if they fall below the target

CRL Statement on the Loss of Julian Bond

We at the Center for Responsible Lending were deeply saddened by the loss of Julian Bond, a great American, our friend, colleague and a member of the CRL Board of Directors. We all knew Julian as an iconic warrior in the trenches of the American civil rights movement. As a founding and longtime CRL board member, Julian also brought vision, leadership and passion to the battle for economic justice for millions of Americans, especially for those who have low incomes, are senior citizens and members of the armed services, or who live in communities of color. As early as 1967, during his time in

Discover Bank’s Illegal Student Loan Servicing Practices Show Need for New Rules

Yesterday, the Consumer Financial Protection Bureau (CFPB) issued a consent order requiring Discover Bank to pay a $2.5 million dollar fine and $16 million in refunds to consumers for illegal student loan servicing practices. The bank overstated the minimum amounts due on billing statements and denied consumers information they needed to obtain federal tax benefits. According to the CFPB, the company also engaged in illegal debt collection tactics. Maura Dundon, an expert on student lending and a Senior Policy Counsel at the Center for Responsible Lending, gave the following statement: The

Military Lending Act Rules Stop 'Debt Trap' Payday, Car-Title, Installment Loans to Service Members

In a speech today in Pittsburgh at the annual Veterans of Foreign Wars convention, President Obama announced new Department of Defense rules to further protect service members and their families from predatory lending practices. The rules strengthen the Military Lending Act (MLA), closing loopholes unscrupulous lenders use to target military families with predatory, high-cost loans, and applying the Act's rules to all existing lending practices in the marketplace. The new rules go into effect October 1. Center for Responsible Lending President Mike Calhoun gave the following statement: The

CFPB Seeks Information on Student Loan Servicing Issues

The Consumer Financial Protection Bureau issued a Request for Information (RFI) soliciting feedback on student loan servicing issues. CRL submitted comments to this request for information – comment author Maura Dundon offered the following remarks on student loan servicing issues: Fair student loan servicing is critical to protect borrowers and help them repay their loans successfully. But student loan servicing stands today where mortgage servicing stood over a decade ago: critically important and largely ignored. We have seen that the handling of student loans is rife with problems; some

Honda Finance Settles with CFPB, DOJ over Discriminatory Dealer Interest Rate Markups

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Today, the Consumer Financial Protection Bureau (CFPB) announced that it has reached a settlement with Honda Finance Corporation, which will result in the finance company paying $24 million in restitution to affected borrowers. Honda's past practices resulted in thousands of borrowers of color paying higher interest rates than white borrowers. The company will also change its lending practices to reduce discrimination, and submit to additional oversight to monitor for discriminatory impact. CRL Senior Vice President Chris Kukla released the following statement: The terms of the settlement are

Debt Collection Settlement Holds Bank Accountable for Errors

Yesterday, the Consumer Financial Protection Bureau and legal officials from 47 states and Washington, D.C. announced a joint settlement with JPMorgan Chase that will result in the bank paying $136 million in fines and $50 million in restitution based on investigations into its debt collection and debt sales practices. The investigations focused on the selling of "zombie debts" and incorrect consumer data to third-party debt collectors and the use of improper debt collection techniques, including "robo-signing", the rapid signing of legal documents without adequate review. Lisa Stifler, Policy

HUD Issues Common Sense Regulation to Protect Fair Housing

The US Department of Housing and Urban Development today released its rule on Affirmatively Furthering Fair Housing (AFFH), taking definitive actions that will address "disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws." CRL executive vice president Nikitra Bailey commented: Today the Department of Housing and Urban