May 4, 2015

The Consumer Financial Protection Bureau (CFPB) recently announced what may be its boldest move yet: a $63 million enforcement action in coordination with the Federal Trade Commission (FTC) against Minnesota-based mortgage servicer, Green Tree Servicing, LLC. The Green Tree enforcement action follows quickly on the heels of several smaller enforcement actions by the CFPB, including complaints filed against an alleged robo-call phantom debt collection scheme and another action against a company accused of wrongfully using the logos of the Department of Veterans Affairs (VA) and Federal Housing Administration in advertisements for mortgage loans. And even more recently, in the CFPB’s first overdraft enforcement action, it announced that it had fined a bank nearly $7.5 million to resolve allegations that the bank had charged consumers unlawful overdraft fees.

Companies operating in the consumer financial industry, from mortgage servicers to debt collectors, should take note of the CFPB’s increased oversight activity. Given the breadth of its enforcement powers, e.g., it can obtain immediate injunctive relief halting business operations and freezing business assets, as well as civil damages and fines, a CFPB enforcement action could be crippling to your business.

The increase in enforcement activity by the CFPB comes in conjunction with the announcement that the CFPB will publicly disclose consumer complaints received through the CFPB’s web-based complaint database. Businesses should take note because by going public with the complaint database and increasing its high-profile enforcement, the CFPB is moving beyond its infancy into a more aggressive role in the consumer finance industry.

To view the full alert, click here.