In 2012, the OCC took a supervisory action that resulted in the elimination of two different credit features on Insight prepaid cards issued by Urban Trust Bank. The cards were being used by the payday lender CheckSmart to evade the payday loan laws of Arizona, Ohio, and other states. In one version, the consumer could opt in to overdraft coverage, resulting in “negative balance” fees on the prepaid card that effectively amounted to a $15 per $100 payday loan.
Original version of an exemption for certain subordinate loans from Regulation X requirements concerning the HUD-1 settlement statement, the good faith estimate, the mortgage servicing transfer statement, and the settlement costs booklet.
Problems with loan originator compensation.
As homeowners struggle to recover from the pandemic and deal with soaring inflation, some risk losing their homes to a strict and often rapid tax lien foreclosure process. As many as 8.5 million homeowners could become delinquent on their property taxes in 2023. The U.S. Supreme Court recently ruled in Tyler v. Hennepin County that it is unconstitutional for a local government to take a home in a property tax foreclosure and keep the homeowner’s equity after the tax debt and costs are paid.
This CFPB consumer education file explains to consumers what a zombie second mortgage is.
This CFPB blog explaining consumer rights when a debt collector contacts consumers regarding a zombie second mortgage.
This CFPB advisory opinion, 88 Fed. Reg. 26475 (May 1, 2023) and effective May 1, 2023, explains that the FDCPA and Regulation F prohibit a debt collector from suing or threatening to sue to collect a time-barred debt. Accordingly, a debt collector who brings or threatens to bring a state court foreclosure action to collect a time barred mortgage debt may violate the FDCPA and Regulation F.
Description: This CFPB circular states that creditors may not rely on the checklist of reasons provided in the sample forms (currently codified in Regulation B) to satisfy their obligations under ECOA if those reasons do not
specifically and accurately indicate the principal reason(s) for the adverse action. Nor, as a general matter, may creditors rely on overly broad or vague reasons to the extent that they obscure the specific and accurate reasons relied upon.
This CFPB circular states that is is an unfair practice for a financial institution, after the consumer closes a deposit account, to unilaterally reopen the account and process a deposit or debit.
Description: This CFPB circular states that negative option marketing practices may be unfair, deceptive, or abusive where a seller (1) misrepresents or fails to clearly and conspicuously disclose the material terms of a negative option program; (2) fails to obtain consumers’ informed consent; or (3) misleads consumers who want to cancel, erects unreasonable barriers to cancellation, or fails to honor cancellation requests that comply with its promised cancellation procedures.