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On March 24, the CFPB published its Consumer Response Annual Report for 2020, providing a review of the Bureau’s complaint process and a description of complaints received from consumers in all 50 states and the District of Columbia between January 1 and December 31, 2020. According to the report, the Bureau handled approximately 542,300 consumer complaints—an almost 54 percent increase from 2019. Of these complaints, the Bureau noted that roughly 32,100 complaints referenced the Covid-19 pandemic or related keywords, but emphasized that complaints that did not include Covid-19 as a keyword were not necessarily an indication that the complaint was not related to the financial impact of the pandemic. Additionally, roughly 84 percent of the complaints were submitted to companies for review and response, nine percent were referred to other regulatory agencies, and seven percent were determined to be incomplete. Report data showed that more than 3,300 companies responded to complaints received by the Bureau, with roughly 11,100 complaints receiving administrative responses. In addition, as of February 1, 2021, approximately 3,900 complaints were still being reviewed by companies, the report stated. The top products and services—representing approximately 92 percent of all complaints—were credit or consumer reporting, debt collection, credit cards, checking or savings accounts, and mortgages. The Bureau also received complaints related to: (i) money transfers and virtual currency; (ii) vehicle finance; (iii) prepaid cards; (iv) student, personal, and payday loans; (v) credit repair; and (vi) title loans. The CFPB also reported that 89 percent of consumers who submitted complaints indicated that they first tried to resolve their issues with the companies.
On March 22, the CFPB and the FTC released their 2020 annual report to Congress on the administration of the FDCPA. Under a memorandum of understanding, the agencies are provided joint FDCPA enforcement responsibility and may share supervisory and consumer complaint information, as well as collaborate on education efforts. Among other things, the report provides a broad overview of the debt collection industry during the Covid-19 pandemic and highlights enforcement actions, education efforts, policy initiatives, and supervisory findings. The report also notes that the Bureau handled roughly 82,700 complaints filed by consumers about first- and third-party debt collectors in 2020, up from the 75,000 complaints it received in 2019, and engaged in four public enforcement actions arising from alleged FDCPA violations. Judgments resulting from these actions yielded nearly $15.2 million in consumer redress and $80,000 in civil money penalties. Additionally, the report discusses the Bureau’s FDCPA-rulemaking actions taken last year, including the issuance of two final rules amending Regulation F, which implements the FDCPA (covered by InfoBytes here and here). The report notes that both final rules are scheduled to take effect on November 30, but also refers to a February statement released by acting Director Dave Uejio, in which he “directed staff to ‘explore options for preserving the status quo’” with respect to the debt collection rules.
Earlier in the week, the FTC announced it provided the CFPB last month with its annual summary of debt collection-related activities taken in 2020. While the FTC’s debt collection program primarily focuses on enforcement investigations and litigation with respect to violations of the FDCPA and the FTC Act, the summary also highlights Commission efforts to engage in public outreach, as well as partnerships with the Bureau and other government agencies to combat unlawful debt collection practices. Highlights of the summary include:
- The creation of Operation Corrupt Collector, a nationwide enforcement and outreach effort led by the FTC in coordination with the CFPB and more than 50 federal and state law enforcement partners to target illegal debt collection practices (covered by InfoBytes here).
- The FTC filed or resolved seven cases against 39 defendants, obtaining $26 million in judgments.
- The FTC accused a company and three of its officers of allegedly engaging in passive debt collection—a practice known as “debt parking”—in which the defendants placed debts that consumers did not owe or the defendants were not authorized to collect on consumers’ credit reports without first attempting to communicate with the consumers about the debts (covered by InfoBytes here).
- The FTC and the New York attorney general permanently banned an individual defendant accused of engaging in “serious and repeated violations of law” from participating in debt collection activities (covered by InfoBytes here).
- The FTC produced educational materials for both consumers and debt collectors covering rights and responsibilities under the FDCPA and FTC Act, including resources specifically for Spanish speakers.
On February 10, CFPB acting Director Dave Uejio published a blog post sharing his “broad vision” for the Division of Consumer Education and External Affairs (CEEA). This guidance, Uejio emphasized, will help to immediately advance the Bureau’s policy priorities and protect economically vulnerable consumers, which includes making sure consumers who submit complaints to the Bureau “get the response and the relief they deserve.” Observing that some companies have not met their obligations to respond to consumer complaints, Uejio reiterated that “[i]t is the Bureau’s expectation that companies provide substantive responses that address the issues consumers describe in their complaints.” He also noted that because consumer advocates have identified disparities in certain companies’ responses to Black, Brown, and Indigenous communities, he asked Consumer Response to provide an analysis identifying companies with poor track records on these issues. To achieve his goal of assisting economically vulnerable consumers, Uejio asked CEEA to take the following steps:
- Target resources to ensure struggling homeowners in delinquency or at risk of foreclosure and renters at risk of eviction know their rights.
- Increase coordination efforts with other agencies to provide assistance and information to at-risk homeowners and renters.
- Collaborate with coalitions of stakeholders, including consumer advocates, civil rights groups, grassroots, community-based organizations, and individual consumers to ensure homeowners receive information and assistance in languages and terminology they understand.
- Help ensure homeowners and renters can access HUD-approved housing counseling organizations so they can manage financial hardships due to Covid-19.
- Take the lead on updating the Bureau’s website so it is more user friendly and focused on consumers rights, and expand the Bureau’s social media presence so consumers can be heard from directly.
- Aggressively rebuild and repair the Bureau’s relationships with external stakeholders who support economically vulnerable consumers, including consumer, civil rights, racial justice, and tribal and Indigenous rights groups.
Since being named acting Director, Uejio has also published blog posts conveying his visions for the Division of Research, Markets, and Regulations and the Office of Supervision, Enforcement, and Fair Lending (covered by InfoBytes here and here).
On July 29, the California Department of Business Oversight (DBO) announced a large uptick in consumer complaints and inquiries received since the beginning of the Covid-19 pandemic. From March through the end of June, the DBO states that consumer complaints increased more than 37 percent, email inquiries increased 86 percent, and consumer calls increased 22 percent. These sharp increases, DBO notes, are primarily due to Covid-19-related concerns about “mortgages, student loans, personal loans, questionable investments, and apparent fraudulent schemes.”
On July 16, the CFPB released a newly updated consumer complaint bulletin analyzing complaints the Bureau has received during the Covid-19 pandemic. The bulletin analyzes complaints mentioning coronavirus-related key words (such as Covid, coronavirus, pandemic, CARES Act, and stimulus) that were received as of May 31. Complaints related to Covid-19 accounted for 8,357 of the more than 187,000 complaints the Bureau has received in 2020. Highlights of the bulletin include: (i) mortgage and credit cards are the top complaint categories for Covid-19 complaints; (ii) after the emergency declaration, the weekly average complaint volume for prepaid cards grew 105 percent, while the volume for student loans decreased by 24 percent; and (iii) 10 percent of complaints submitted by servicemembers were Covid-19 related compared to six percent of non-servicemember complaints. As previous covered by InfoBytes, in May, the Bureau issued the first complaint bulletin analyzing approximately 4,500 Covid-19-related complaints received at that time.
Additionally, the CFPB announced new capabilities for the public Consumer Complaint Database, including the ability to (i) view complaints over time to review for trends; (ii) refine visualizations based on user selected criteria; and (iii) aggregate complaints by various categories, such as issues and products.
On June 11, the FTC released new interactive complaint data dashboards, which provide national and state-level breakdowns on consumer complaints related to Covid-19. The expanded reporting provides data on several categories, including fraud, identity theft, and unwanted calls. According to one of the dashboards, “of the total fraud reports indicating a dollar loss, 87.8% [also referenced] a payment method,” with credit cards, bank account debits, and internet/mobile methods representing the top three categories. The FTC reports that consumers have submitted over 91,000 Covid-19-related complaints during 2020 as of June 8, and reported losing almost $60 million to Covid-19-related fraud.
On May 21, the CFPB issued a consumer complaint bulletin analyzing complaints the Bureau has received during the Covid-19 pandemic. The bulletin analyzes complaints mentioning “COVID, coronavirus, pandemic, or CARES Act” that were received as of May 11. Of the over 143,000 complaints the Bureau has received in 2020, 4,541 complaints were related to Covid-19. Highlights of the bulletin include: (i) overall, the Bureau had the highest complaint volumes in its history in March and April at 36,700 and 42,500, respectively; (ii) mortgage and credit cards are the top complaint categories for Covid-19 complaints; (iii) eight percent of complaints submitted by servicemembers were Covid-19 related compared to five percent of non-servicemembers; and (iv) after the emergency declaration, the weekly average complaint volume for prepaid cards grew 84 percent, while the volume for student loans decreased by 19 percent. Among other things, the bulletin includes breakdowns of complaint volumes by consumer financial products and examples of common issues from complaint narratives that mention a Covid-19 keyword.
On April 27, the CFPB announced enhancements to its Consumer Complaint Database. With the addition of a geospatial view, consumers will now be able to view complaints by state using an interactive map. Additional new options will also allow users to view recent marketplace conditions and aggregate information concerning specific products and issues compiled from consumer complaints. In addition to being able to filter complaints by date, company name, and key words, users will now be able to apply word searches and filters to the interactive map.
On April 23, the FTC released its 2019 Annual Highlights, which outlines the Commission’s efforts over the past year to protect consumers and promote competition. The report discusses various enforcement actions, policy and advocacy initiatives, and education and outreach programs, and notes that FTC actions in 2019 have led to more than $232 million in refunds to consumers. The report covers a range of consumer protection enforcement actions related to, among other things, unfair and deceptive marketing as well as privacy and data security issues. The report also discusses joint consumer protection enforcement-related efforts with foreign agencies and multilateral organizations, as well as information-sharing and enforcement cooperation measures intended to streamline and facilitate joint law enforcement investigations. In addition, the report highlights recent policy actions, such as advocacy comments, amicus briefs, and Congressional testimony, and discusses education efforts undertaken in 2019 including: (i) a series of public hearings on Competition and Consumer Protection in the 21st Century; (ii) workshops with state regulators and law enforcers; (iii) workshops on consumer protection issues such as small business financing, consumer reporting accuracy, and privacy matters; and (iv) education outreach programs. According to the stats and data section of the report, the FTC received more than 3.2 million consumer reports in 2019, in which identity theft and imposter scam complaints represented over 40 percent of the total reports received.
On April 3, the CFPB Office of Servicemember Affairs (OSA) released its annual report, which provides an overview of OSA’s activities in fulfilling its statutory responsibilities for fiscal year 2019 and covers the period between October 1, 2018 and September 30, 2019. OSA’s responsibilities include monitoring complaints from military consumers, and the report highlights issues facing military consumers based on approximately 34,600 complaints submitted by servicemembers, veterans, and their families (collectively “servicemembers”). Key takeaways from the report include the following:
- Education and empowerment. OSA examined financial issues that impact military consumers and provided various educational tools on topics including the Servicemembers Civil Relief Act, the Military Lending Act, mortgage lending and foreclosure protections, and credit reporting and monitoring. These tools include in-person outreach and digital education and engagement resources.
- Consumer complaints. Thirty-six percent of servicemember complaints focused on credit or consumer reporting. Complaints related to debt collection were the second most frequent issue, with most complaints alleging that debt collectors were attempting to collect debt that the servicemember did not owe. In particular, OSA expressed concern about complaints where “the debt collector ‘took or threatened to take negative or legal action.’” With respect to mortgage debt, many servicemembers reported challenges in the payment process, as well as difficulties in being able to afford mortgage payments. With respect to credit cards, the greatest concentration of complaints focused on problems with purchases on statements. Checking or savings account complaints centered on issues related to account management, and more than two-thirds of student lending complaints related to challenges dealing with lenders or servicers. With respect to auto lending, complaints focused on managing the loan or lease. Other complaint categories included money transfers/services and virtual currency, personal loans, prepaid cards, credit repair, and title loans.
- Agency coordination. During the reporting period, OSA coordinated several consumer protection activities with federal and state government agencies, including the Departments of Defense, Veterans Affairs (VA), Education, and Treasury, as well as the FTC, SEC, and state attorneys general. OSA also noted its participation in interagency working groups focused on helping servicemembers.
- Military consumer research. Coordinated research efforts into the financial well-being of veterans and the increased use of home loans guaranteed by the VA are highlighted.
- Jonice Gray Tucker to join CFPB panel at CBA’s Washington Forum
- Jonice Gray Tucker to moderate “Pandemic relief response and lasting impacts on access, credit, banking, and equality” at the American Bar Association Business Law Section Spring Meeting
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference