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In a court filing this week, the Department of Justice rejected a Texas bank's claim that the Dodd-Frank law, and the CFPB in particular, were unconstitutional and harmful to financial institutions.
November 21 -
A group of bankruptcy attorneys is warning cash-strapped borrowers against the hazards of working with companies that promise to reduce debt in exchange for a fee.
October 18
WASHINGTON — The Consumer Financial Protection Bureau and several state attorneys general won their first joint-case Friday against a debt-settlement company in Florida.
A federal district court in Miami ordered Payday Loan Debt Solution Inc. to refund up to $100,000 to consumers who were unlawfully charged advanced fees on debt-settlement services never rendered. The state attorneys general of New Mexico, North Carolina, North Dakota, Wisconsin and Hawaii's Office of Consumer Protection also joined the case.
"Today's order will put money back in the pockets of consumers who were wrongfully charged for debt-relief services," CFPB Director Richard Cordray, said in a press release. "We are pleased to be working with our state partners on this important effort to protect consumers."
Upon investigation, the CFPB found that Payday Loan Debt Solution routinely charged consumers fees before settling their debts. The CFPB said the company cooperated with the bureau and immediately stopped such conduct once it was notified of the investigation.
The court ordered Payday Loan Debt Solutions to fully refund consumers who were charged advance fees but did not receive services by the time their accounts were closed. The company was also ordered to pay a $5,000 penalty to the CFPB Civil Penalty Fund. Though the fees seem small, the message was clear that the CFPB has ramped up its investigations into consumer fraud.
"This action is part of the CFPB's comprehensive effort to prevent consumer harm in the debt-relief industry," the CFPB said in its release. "The bureau is working to ensure federal consumer laws are being followed at every stage of the process and is focusing not only on debt-relief service providers, but also on their partners, including those who facilitate their unlawful conduct and who may also violate federal consumer financial laws."
