Acting Director David Uejio Issues Warning: CFPB Will Take Aggressive Action with Regard to COVID-19 On January 28, 2021, Acting Director David Uejio of the Consumer Financial Protection Bureau (CFPB) confirmed the CFPB’s new, aggressive approach to enforcement of COVID-19-related matters. Uejio’s statement, posted as a blog, addresses several areas of concern discovered during last year’s Prioritized Assessments, including:

  • Mortgage servicers providing inaccurate information about CARES Act forbearances, failing to process forbearance requests, and collecting late fees from borrowers placed on a forbearance;
  • Auto loan servicers withdrawing money from accounts of consumers in deferment; and
  • Furnishers of consumer credit information failing to accurately report information consistent with the Fair Credit Reporting Act (FCRA) as amended by the CARES Act.

It is clear the tone of the CFPB has already evolved from last year’s more flexible approach to enforcement to a more urgent and less forgiving approach. Uejio warns that the Supervision, Enforcement, Fair Lending (SEFL) Division will be expediting enforcement investigations relating to COVID-19 “to ensure that industry gets the message that violation during this time of need will not be tolerated.” In addition to issues related to COVID-19, Uejio identified racial equity as a top priority for the CFPB. The CFPB’s focus on racial equity is consistent with government-wide priorities, as the Biden administration has emphasized the pressing need to soften the economic impact of the COVID-19 crisis and simultaneously address racial equity.

Uejio’s statement puts all furnishers of consumer credit information, including mortgage and student loan servicers, on notice of increased CFPB action. While historically, civil lawsuits under the FCRA far outnumber agency actions, the CFPB may be gearing up to crack down on FCRA reporting violations. Under the FCRA as amended by the CARES Act, furnishers who make an accommodation for a consumer because of COVID-19 are required to do the following:

  • If the account was current before the accommodation, report the account as “current;” and
  • If the account was delinquent before the accommodation, (1) maintain the delinquent status during the accommodation period, and (2) update the status to current if the consumer brings the account current during the accommodation period.

Previously, the CFPB issued guidance indicating a flexible approach to furnisher timelines for investigating consumer disputes during the COVID-19 pandemic. However, with the transition to new CFPB leadership, furnishers should take care to strictly adhere to the 30-day investigatory window prescribed by the FCRA.

The consumer finance regulatory landscape is quickly evolving. In fact, the statements by Uejio indicate that changes at the CFPB will not wait for a confirmed director. Industry participants should take this time to assess their risks, particularly as they relate to COVID-19. As we previously discussed, mortgage servicers and others subject to the Prioritized Assessments should carefully review any findings they received in addition to the Supervisory Highlights. As always, we will continue to monitor issues raised by the CFPB and other regulatory bodies in order to identify priority areas of concern.

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Photo of Michael Gordon Michael Gordon

Michael Gordon is an accomplished consumer finance lawyer with more than 20 years of experience as a law firm partner, senior federal regulator, and fintech general counsel. His practice includes consumer finance and fintech, banking and bank partnerships, consumer and commercial credit, payments…

Michael Gordon is an accomplished consumer finance lawyer with more than 20 years of experience as a law firm partner, senior federal regulator, and fintech general counsel. His practice includes consumer finance and fintech, banking and bank partnerships, consumer and commercial credit, payments, regulatory strategy, risk management and corporate governance matters for a range of clients. Michael is a practical, business-focused lawyer with wide-ranging experience in private practice, government, and as a client. He has established a reputation for helping financial institutions and service providers anticipate and respond to a complex and ever-changing regulatory environment. View articles by Mike.

Photo of Christy W. Hancock Christy W. Hancock

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment…

Christy Hancock’s practice is dedicated to financial services regulatory compliance and litigation. Her work with mortgage servicing and financial institution clients has given her a broad base of knowledge regarding laws affecting the mortgage servicing business, including bankruptcy and foreclosure best practices, payment application, correspondence requirements, allowable fees, loan modifications, escrow requirements, and property preservation. In recent years, the majority of her practice has focused on advising large financial institutions on bankruptcy-related regulatory matters and large-scale remediation projects.

Photo of Jonathan R. Kolodziej Jonathan R. Kolodziej

Jonathan Kolodziej represents all types of consumer financial service providers in regulatory compliance, examination and enforcement matters. Through this work, he has assisted bank and non-bank mortgage servicers, mortgage originators, debt collectors, depository institutions, credit card issuers, small dollar lenders, reverse mortgage companies…

Jonathan Kolodziej represents all types of consumer financial service providers in regulatory compliance, examination and enforcement matters. Through this work, he has assisted bank and non-bank mortgage servicers, mortgage originators, debt collectors, depository institutions, credit card issuers, small dollar lenders, reverse mortgage companies, investment firms, and various industry trade associations.

Photo of Gabriella E. Alonso Gabriella E. Alonso

Gabriella Alonso advises clients on financial services matters, as well as corporate disputes. She prepares submissions for state and federal courts and helps clients as they progress through each stage of litigation.

In law school, Gabriella served as a student case worker for…

Gabriella Alonso advises clients on financial services matters, as well as corporate disputes. She prepares submissions for state and federal courts and helps clients as they progress through each stage of litigation.

In law school, Gabriella served as a student case worker for the Advanced Administrative Litigation Clinic, where she assisted coal miners and surviving family members pursue claims for Federal Black Lung benefits.