The CFPB is taking a victory lap on 2023. They recently posted on their blog to highlight their enforcement work last year and the tools at their disposal to reinforce “compliance with federal consumer financial laws and sending a clear message to entities within [their] authority and the public that the CFPB remains vigilant on behalf of consumers.” They also provided some hints as to their plans for the year ahead.
In 2023, the CFPB filed 29 enforcement actions and resolved through final orders six previously-filed lawsuits. Those orders required payment of approximately $3.07 billion to compensate harmed consumers and pay approximately $498 million in civil monetary penalties. Some of the key enforcement actions are as follows:
- In July, Bank of America was ordered to pay more than $100 million for systematically “double-dipping” insufficient funds fees, withholding reward bonuses owed to credit card customers, and misappropriating sensitive personal information without customer authorization.
- In August, the CFPB took legal action against Heights Finance Holding Company for illegally churning loans to collect hundreds of millions in loan costs and fees, alleging that it coerces “distressed borrowers into fee-laden cycles of reborrowing, incentivizes its employees to push refinances on consumers, targeting customers for their likelihood of refinancing and falsely marketing refinances as fresh starts.”
- In August, the CFPB entered into a settlement agreement with a group of credit repair companies who it says had collected illegal advance fees for credit repair services. The agreement imposed a $2.7 billion judgment.
- In November, the CFPB ordered Citibank to pay millions in fines for what it said was a systematic discrimination scheme against Armenian Americans. The CFPB alleged that for years Citibank singled out applicants for certain credit card products based on whether or not they had surnames that implied Armenian descent and that Citibank took efforts to hide their discriminatory practices. It said that Citibank employees then lied about the basis of denial and provided false reasons to denied applicants.
Based on the actions the CFPB chose to highlight we can make a few assumptions about their current priorities. Predictably, there is a focus on what they deem “junk” fees. That is a noted priority of the Biden administration and federal regulators are definitely increasing scrutiny of bank fees. “Junk” fees have seemingly come to encompass a variety of fees, from NSF to credit repair fees as these enforcement actions demonstrate. There is also a focus on discrimination and coercion of distressed borrowers, using their UDAAP/UDAP and fair lending authorities.
Importantly, the CFPB also looked to the year ahead, saying that it is “significantly” “growing [its] capacity” in 2024. They now have “a team of technologists dedicated to enforcement” and they’re hiring “enforcement attorneys as well as non-attorney positions, including analysts, paralegals, e-litigation support specialists, economists, and more.” This implies an expectation of increased enforcement actions and, given how closely regulators work together, it may indicate a potential uptick of enforcement actions across regulators.