The CFPB recently brought an $8 million enforcement action against Clarity Services, a national credit reporting firm based in Clearwater, FL, and its owner, Tim Ranney, for allegedly obtaining consumer credit reports illegally and for failing to appropriately investigate consumer disputes. Clarity focuses on data reporting for the under-banked, near prime, and subprime consumer segments, and provides information that is not available from traditional reporting agencies. Instead, its reports are derived from a variety of financial service providers, including auto financers, check cashers, prepaid card issuers, short-term installment lenders, peer-to-peer micro lenders, small-dollar credit lenders, and online small-dollar credit lenders. “Credit reporting plays a critical role in consumers’ financial lives,” said CFPB Director Richard Cordray. “Clarity and its owner mishandled ...

The CFPB recently filed a $2.59 million federal complaint against EOS CCA, a debt collection firm based in Norwell, MA, accusing the company of reporting and collecting on old cellphone debt that consumers disputed and EOS did not verify. The company also allegedly provided inaccurate information to credit reporting companies about the debt and failed to correct reported information that it had determined was inaccurate. The bureau’s action appears to revolve around the firm’s handling of just one large portfolio. According to the CFPB, in 2012, EOS paid AT&T $35.4 million for a portfolio of more than three million cellphone accounts with a total face value of $2.3 billion. “Many of these debts were old accounts that had been previously ...

Early this month, the CFPB denied a petition made by UniRush, the program manager for RushCard, a prepaid debit card, to modify a civil investigative demand (CID) the firm had received from the bureau near the end of October. The CID seeks documents, written reports and answers to interrogatories in connection with the bureau’s investigation into whether prepaid debit card issuers, processors, card networks, service providers to prepaid debit card issuers, or other unnamed persons “have engaged in or are engaging in unlawful acts and practices in connection with the offering, operating or servicing of prepaid debit cards.” UniRush seemed to shoot itself in the foot, according to the bureau’s decision and order. The CFPB’s account of the chronology suggests ...

The more consumers complain to the CFPB about their financial services providers, the more likely those providers are to be fined, and the higher those fines are likely to be, new research suggests. For instance, lenders and other financial services providers face a 58 percent chance of being fined when complaints to the CFPB breach the 2,000 threshold for a company, according to an analysis by PerformLine, a “software-as-a-service” marketing compliance company based in Morristown, NJ. Among the other key findings were a 34 percent increase in the number of consumer complaints year-over-year since 2012, and average fines ranging from $134 million (for companies that received 2,000-10,000 complaints) to $758 million (for companies with 10,000+ complaints). Sliced another way, the ...

Standard & Poor’s rated some $84.64 billion of non-mortgage ABS issued in the U.S. during the first nine months of the year, making it the top rating service in the segment, according to a new ranking by Inside MBS & ABS. S&P was well represented in all the major ABS sectors, with its strongest showing in credit card ABS, where it rated 73.4 percent of 2015 issuance based on dollar volume. Fitch Ratings was...[Includes two data tables]

Industry analysts are generally optimistic that most of the large consumer ABS sectors will probably see a stable, positive year in 2016. However, they’re not very gung-ho about what kind of a year the government-backed student loan space is going to have. Analysts at Wells Fargo Securities think that consumer ABS should offer good relative value next year, based on solid credit fundamentals and robust structural protections. “We expect spreads to tighten in 2016 as the primary market recovers and the yield curve flattens along with Federal Reserve tightening,” they said in a recent outlook. “Spreads are likely to stay volatile and event-driven.” Further, “Weak demand and poor liquidity have been...

Search engine giant Google recently launched a new mortgage comparison tool that allows borrowers and lenders to search for the lowest rates, a development that will be carefully watched for the simple reason that, well, it’s Google. The mortgage tool is a part of Google Compare, a service that allows consumers to compare options for various products, such as credit cards and auto insurance. Though the effort is branded with Google’s name, the company has teamed up with Zillow and LendingTree to introduce this service. Compare allows...

The CFPB indicated in its recently released 2015 rulemaking agenda that it is continuing to finalize a proposal it published in December 2014 to amend certain aspects of the bureau’s 2013 mortgage servicing rules. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy. “We have been conducting testing of periodic statements for consumers in bankruptcy and are working to develop the final rule for issuance in mid-2016,” the CFPB said. The bureau also will continue working to support implementation of the multiple mortgage rules required by the Dodd-Frank Act, such as the Home Mortgage Disclosure Act rule, the integrated ...

Consumer complaints about debt collectors appear to be improving somewhat, according to the latest analysis by Inside the CFPB of data submitted to the bureau. Gripes were down 9.4 percent during the third quarter, but off a barely perceptible 0.3 percent at the nine-month mark versus a year ago. Many of the top 50 companies ranked by number of complaints saw drops of double digits during the period ending Sept. 30, 2015, whereas a handful of companies saw consumer grumbling rise by triple digits year over year. In some instances, however, both dynamics occurred at the same company, the data show.Complaints about collection attempts were the leading consumer criticism, followed by disclosure verification and communication tactics. Supervisory Illustrations On...

The Structured Finance Industry Group and Securities Industry and Financial Markets Association plan to file a “friend of the court” brief with the Supreme Court of the United States in support of a defendant in a case affecting consumer ABS – the severity of which is a matter of debate. In the case of Madden v. Midland Funding, the Second Circuit Court of Appeals back in May determined that a debt buyer who purchased defaulted credit card accounts from a national bank is not entitled to collect interest under the National Bank Act at the rate set in the cardholder agreement. About a month later, SFIG and SIFMA filed...