In a November 28 advisory bulletin entitled Detecting and Preventing Consumer Harm from Production Incentives, the CFPB highlights examples from its supervisory and enforcement experience in which incentives contributed to substantial consumer harm. The bulletin also describes compliance management steps that supervised entities should take to mitigate risks posed by incentives. Among other things, the CFPB clarifies that it is not outlawing sales incentives or other similar programs, but rather is cautioning companies that such programs can lead to abuse. As explained in the bulletin, “[t]ying bonuses or employment status to unrealistic sales goals or to the terms of transactions may intentionally or unintentionally encourage illegal practices such as unauthorized account openings, unauthorized opt-ins to overdraft services, deceptive sales tactics, and steering consumers into less favorable products.”
FCC Denies Petition by MBA to Exempt Certain Mortgage Servicing Calls from Prior Express Consent Requirement
In an order dated November 15, the FCC’s Consumer and Governmental Affairs Bureau denied a petition by the Mortgage Bankers Association (MBA) that sought an exemption from the FCC’s prior express consent requirement for non-telemarketing residential mortgage servicing auto-dialer calls to wireless numbers. In its order, the Bureau concluded that MBA had failed to show (1) that the calls in question would be free of charge to consumers; and (2) that the parties seeking relief should be able to send non-time-sensitive calls to consumers without their consent.
Among other things, the Order explained that the Telephone Consumer Protection Act (TCPA) “reflects Congress’ recognition of the potential costs and privacy risks imposed on wireless consumers from the use of auto-dialer equipment, which can generate large numbers of unwanted calls” and accordingly, the FCC has generally attempted to balance and accommodate the legitimate business interests of callers in addition to recognized consumer privacy interests.
On November 29, the OCC announced the release of a revised Bank Premises and Equipment booklet of the Comptroller’s Handbook. The revised booklet, which replaces the booklet of the same title issued in March 1990, applies to examinations of all national banks and federal savings associations engaged in the acquisition, management, and disposal of bank premises and equipment. According to the accompanying OCC Bulletin, the revised booklet incorporates updated statutory and regulatory citations and revised examination procedures since the integration of the Office of Thrift Supervision into the OCC in 2011. The bulletin explains that the booklet also replaces the “Investment in Bank Premises” booklet of the Comptroller’s Licensing Manual and the “Fixed Assets” section of the former Office of Thrift Supervision Examination Handbook.
CFPB Monthly Complaint Snapshot Spotlights Debt Settlement, Check Cashing, and Other Financial Services Complaints
On November 29, the CFPB released Volume 17 of its monthly complaint snapshot reports on consumer complaints stemming from financial services that fall outside of the Bureau’s major complaint categories. The “other financial services” covered in the report include debt settlement, check cashing, money orders, and credit repair. To date, the CFPB has handled approximately 1,035,200 complaints nationally across all products. As reported in the current snapshot: (i) Debt collection was the most-complained-about financial product or service in October; (ii) Student loan complaints showed the greatest increase—108 percent—of any product or service over the three-month period of August to October; and (iii) Alaska, New Mexico, and Missouri experienced the greatest year-to-year complaint volume increases from August to October 2016 period versus the same time period 12 months before. The current report also highlighted a trend in complaints coming from Oklahoma and the Oklahoma City metro area.
On December 1, the CFPB published an updated version of the Mortgage Servicing Small Entity Compliance Guide on its “Mortgage Servicing Implementation & Guidance” webpage. The updated guide incorporates amendments made to mortgage servicing provisions in Regulation X and Regulation Z by the 2016 Mortgage Servicing final rule. Most provisions of the 2016 Mortgage Serving final rule take effect on October 19, 2017. However, the provisions relating to successors in interest and the provisions relating to periodic statements for borrowers in bankruptcy will not take effect until April 19, 2018.