On September 2, 2020, the Consumer Financial Protection Bureau (CFPB) announced it had entered into a consent order with a Delaware-based VA-mortgage lender, resolving allegations that the company had engaged in deceptive practices against servicemembers and veterans. The CFPB found that since April 2018 the Company had mailed current and former servicemembers misleading advertisements that were missing required disclosures, in violation of § 1026.24 of Regulation Z, 12 C.F.R. § 1026.24, the implementing regulation of the Truth in Lending Act (TILA), 15 U.S.C. §§ 1601–1667f; § 1014.3 of the Mortgage Acts and Practices—Advertising Rule (MAP Rule or Regulation N), 12 C.F.R. § 1014.3; and §§ 1031 and 1036 of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536.
The consent order stated that the company’s direct mail advertisements contained specific credit terms and interest rates for loans, when such terms were not actually available to consumers. The company also falsely implied that it was associated with the government, including the United States Department of Veterans Affairs.
Under the terms of the consent order, the company agreed to pay a $225,000 civil money penalty, and also to discontinue similar conduct in the future. This is the latest of several recent consent orders between the CFPB and mortgage lenders and brokers involving direct mailers for VA-guaranteed mortgages.