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The Consumer Financial Protection Bureau Steps Up Its Scrutiny

Debt Relief
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The Consumer Financial Protection Bureau was established in 2011 as an independent agency of the United States government. The CFPB regulates the offering of consumer products and services under federal laws. The CFPB was put in place by congress after the financial crisis, and has since conducted many investigations dealing with credit card practices, auto lending, and debt collection. Each year the federal watchdog has stepped up its scrutiny, and in 2015 the agency doubled its number of  cases.

In 2015, the agency handled 59 cases in which companies settled based on claims of wrongdoing, and 11 cases that led to lawsuits. In 2014, the CFPB handled 23 settlements and 11 lawsuits and in 2013 they had 21 settlements and 7 lawsuits. This is a very steady increase in just a couple of years, and at this pace we may see even more cases brought forward by the CFPB in 2016.

The increase is directly correlated to the growth in the number of investigators, examiners and administrative staff that it now has on hand. It also reflects the improvement of the bureaus’s  practices and policies after fours of being established.

Last year, consumers saw $6 billion in relief from damages and $1 billion in restitution for unlawfully obtained gains that were returned to consumers. There are many cases that where initiated two years ago while the CFPB was still growing, which has resulted in the steep increases in cases brought forward each year. In an analysis of the cases in 2015, Udapp violations accounted for more than three quarters of all enforcement actions by the CFPB.

The CFPB has an annual budget of $524.4 million, and more than a quarter of the CFPB’s budget is being used by its supervision, enforcement and fair lending division, whose spending grew by 3.7 percent from the year prior. If this is any indication of the bureau’s ongoing efforts, then  we should see an increase in the number of cases brought against financial institutions that have violated the Udaap rules.

The Director of CFPB enforcement, Tony Alexis, would not comment on whether the financial watchdog’s activities would grow even more in 2016 as result of stepping up enforcement. Mr. Alexis did say that the bureau’s supervision and enforcement operations are fully functional, and will be particularly active this year specifically regarding debt collection, mortgage servicing, and student loan servicing.

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