June 9: CFPB Updates This Week

Five federal regulatory agencies today requested public comment on proposed guidance addressing reconsiderations of value (ROV) for residential real estate transactions. The proposed guidance advises on policies that financial institutions may implement to allow consumers to provide financial institutions with information that may not have been considered during an appraisal or if deficiencies are identified in the original appraisal. ROVs are requests from a financial institution to an appraiser or other preparer of a valuation report to reassess the value of residential real estate. An ROV may be warranted if a consumer provides information to a financial institution about potential deficiencies or other information that may affect the estimated value.

The proposed guidance shows how ROVs intersect with appraisal independence requirements and compliance with applicable laws and regulations. The proposed guidance describes how financial institutions may create or enhance their existing ROV processes while remaining consistent with safety and soundness standards, complying with applicable laws and regulations, preserving appraiser independence, and remaining responsive to consumers.

Additionally, the proposed guidance would describe the risks of deficient residential real estate valuations and how financial institutions may incorporate ROV processes into established risk management functions. Deficient collateral valuations can contain inaccuracies due to errors, omissions, or discrimination that affect the value conclusion. The proposed guidance would also provide examples of ROV policies and procedures that a financial institution may establish to help identify, address, and mitigate valuation discrimination risk.


CFPB Takes Action Against Phoenix Financial Services for Illegal Medical Debt Collection and Credit Reporting Practices

The Consumer Financial Protection Bureau (CFPB) took action against medical debt collector Phoenix Financial Services (Phoenix) for numerous debt collection and credit reporting violations. In at least thousands of cases, Phoenix continued to attempt to collect on a debt that was not substantiated after a consumer disputed the validity of the debt. Today’s order requires Phoenix to pay redress to affected consumers, and pay a $1.675 million penalty to the CFPB’s victims relief fund.

Phoenix is a third-party debt collector with its principal place of business in Indianapolis, Indiana. Phoenix collects primarily past-due medical debts, and furnishes information about consumers to consumer reporting companies. Between January 2017 and December 2020, Phoenix received approximately 54.4 million accounts with allegedly outstanding and owed debts from its clients for collection.


The CFPB is extending the deadline for comments about data brokers

On March 15, 2023, the CFPB launched a public inquiry into the data broker industry and the collection and sale of consumer information. To help ensure that the public has ample opportunity to share information, we are extending the deadline for comments until July 15, 2023. Your submissions will help us shed light on an industry that largely operates out of public view as well as inform our future work to ensure that data brokers comply with the law.

Data brokers is a term to describe those companies that collect, aggregate, sell, resell, license, or share our personal information with others. Data brokers include companies that people have a direct relationship with, as well as companies that people may not even know exist, but nonetheless possess data about them.

PUBLISHED CFPB Issue Spotlight Analyzes “Artificial Intelligence” Chatbots in Banking

The Consumer Financial Protection Bureau (CFPB) today released a new issue spotlight on the expansive adoption and use of chatbots by financial institutions. Chatbots are intended to simulate human-like responses using computer programming and help institutions reduce the costs of customer service agents. These chatbots sometimes have human names and use popup features to encourage engagement. Some chatbots use more complex technologies marketed as “artificial intelligence,” to generate responses to customers.


Communities across the nation are working to prevent and respond to elder financial exploitation, which threatens the financial security of millions of older adults each year.

The Consumer Financial Protection Bureau (CFPB) helps state and local organizations create and develop Elder Fraud Prevention and Response Networks, often working with partners to host in-person convenings of local or regional stakeholders.

But what happened during the COVID-19 pandemic, when people were no longer able to convene in person? When reported fraud and scams hit an all-time high? And what happens when scammers target traditionally underserved populations? Here is how the CFPB and elder justice advocates adapted to meet the moment.