CFPB and OCC fine national bank $1 billion for mortgage and auto lending practices
On April 20, the CFPB, in coordination with the OCC, announced a $1 billion settlement with a national bank for certain auto and mortgage lending practices the bank had previously discontinued and for which voluntary consumer remediation was initiated by the bank. According to the CFPB consent order, the Bureau alleged the bank inappropriately (i) charged fees for mortgage rate-lock extensions, and (ii) operated a force-placed insurance program in connection with auto loans. Specifically, the CFPB alleged that the bank sometimes charged rate lock extension fees to consumers when it should have absorbed the fees. With respect to auto loans, the Bureau alleged that, due to issues with the vendor employed to monitor for insurance and issue insurance if not maintained by the consumer, certain consumers paid for force-placed insurance premiums and interest that may not have been required resulting in potential consumer harm. The CFPB consent order acknowledges that the bank voluntarily discontinued the above practices and has voluntarily begun consumer remediation. Under the terms of both of the consent orders, the bank will remediate affected consumers and will implement necessary changes to its compliance risk-management program.