UPDATE: CFPB's $21.6 Million Settlement Concerning Student Loan Servicing and Debt Collection in Doubt

As Enforcement Watch reported in late September, the Consumer Financial Protection Bureau (“CFPB”) announced that it had filed a proposed consent judgment in the United States District Court for Delaware to resolve claims relating to the servicing and debt collection activities on a portfolio of about 800,000 student loans.  Under the proposed settlement agreement, the student loan trusts…

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Court Awards Nearly $280 Million in Treble Damages Against Former FHA Lender

On September 14, 2017, the U.S. District Court for the Southern District of Texas issued an opinion and order against two former mortgage companies and their former president and CEO.  The order, which followed a previous jury verdict against the company, awarded the Government nearly $280 million in treble damages under the False Claims Act (FCA), approximately $13 million…

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CFPB Enters Consent Order with Seattle-Based Payday Lender

On December 16, 2016, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a consent order relating to a Seattle-based payday lender and check-cashing company’s allegedly deceptive online advertisements and collection letters.  The consent order alleges that the company violated sections 1031(a) and 1036(a)(1)(B) of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(a), 5536(a)(1)(B),…

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Jury Issues $92 Million Verdict Under the False Claims Act Against Mortgage Companies and CEO

On November 30, 2016, the U.S. Attorney for the Southern District of Texas announced that a federal jury in the Southern District of Texas issued a verdict finding several related mortgage companies and their CEO liable in connection with their participation in the Federal Housing Administration (FHA) mortgage insurance program.  The verdicts were the result of…

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Q3 2016 Sees Significant Decrease in State Enforcement Actions; Federal Agencies Hold Steady (Interactive Charts Inside)

In the third quarter of 2016, Consumer Enforcement Watch tracked 37 enforcement actions taken against consumer financial service providers.  This represents a decrease from the 46 enforcement actions that were tracked last quarter and the 50 actions that we tracked in Q1.  25 of the Q3 enforcement actions were settlements…

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Vermont AG Settles Lawsuit with California Student Loan Debt Consolidation Company

On November 18, 2016, the Attorney General for the State of Vermont (Vermont AG) announced that it had entered into a settlement with a California student loan debt consolidation company related to the company’s business of helping consumers consolidate their loans to reduce their student loan debt.  As part of the settlement, the…

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Four California Residents Jailed and to Pay $7 Million in Restitution for Debt Relief Scheme

On November 14, 2016, the Department of Justice (DOJ) and U.S. Postal Inspection Service announced that four California individual defendants were sentenced for their participation in an allegedly fraudulent debt relief scheme.  The defendants all worked for two companies in Orange County, California that offered to settle credit card debts.  According to the DOJ,…

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