For the first quarter of 2015, Consumer Finance Enforcement Watch tracked 46 instances of enforcement activity taken against a consumer finance service provider. Not surprisingly, the year started off slow with only 9 enforcement actions taken in January, likely due to agencies wrapping-up actions before year-end 2014.
The 46 actions ranged from court-enforced consent settlement agreements; administrative settlements; administrative actions; new civil litigation in both federal and state courts; and court judgments in active litigation. Half of the activity (23 actions) was brought by federal agencies and U.S. Attorneys’ offices responsible for consumer financial enforcement, and 19 were state actions brought by state attorneys general and state regulatory agencies. There were also four coordinated instances by state attorneys general working with federal agencies against consumer financial service providers.
The Consumer Financial Protection Bureau (CFPB) took the most enforcement actions of any federal or state agency, followed next by the Federal Trade Commission (FTC). In terms of specific industries, mortgage lenders, mortgage servicers and service providers remain the favorite target of both state and federal enforcers having been subject to 21 enforcement actions, followed by auto lenders (6), payday lenders (4), debt collection service providers (4), credit reporting agencies (4), and credit card providers (3). Surprisingly, despite public statements by the CFPB and other agencies that student lending remains a top priority for consumer finance enforcers, there was only one student lending action tracked in the first quarter for 2015.
Federal and state actions resulted in over $350 million in civil penalties and settlement payments to state and federal governments in the first quarter, which included two settlements with the U.S. Department of Justice concerning Federal Housing Administration loans that were each in excess of $100 million. More significantly, however, enforcement activity resulted in over $750 million in direct consumer relief or restitution to consumers. It seems fair, therefore, to conclude that agencies will likely continue this past trend of showing the public that they are committed to directing recovery directly to consumer’s wallets.
Consumer Finance Enforcement Watch will continue to post quarterly and annually on trends in consumer finance enforcement activity. For specific questions regarding trends by enforcers, industry, or other data, please feel free to contact us.