The CFPB’s Enforcement Work In 2023 and What Lies Ahead
The CFPB safeguards household financial stability by ensuring that consumer financial markets are fair, transparent, and competitive. Our enforcement authority is among the CFPB’s most impactful tools—reinforcing compliance with federal consumer financial laws and sending a clear message to entities within our authority and the public that the CFPB remains vigilant on behalf of consumers.
When a financial institution, individual, or other entity subject to the CFPB’s authority breaks the law, the CFPB may take enforcement action against them. In certain cases, the CFPB may partner with other federal, state, or local agencies to investigate the wrongdoing and coordinate the enforcement action.
In 2023, the CFPB filed 29 enforcement actions and resolved through final orders 6 previously-filed lawsuits. Those orders require lawbreakers to pay approximately $3.07 billion to compensate harmed consumers and pay approximately $498 million in civil money penalties.
Key actions in 2023
Some of the enforcement actions the CFPB took included:
- Protecting Servicemembers from Illegal High-Interest Loans and False Advertising: In February, the CFPB took action against a web of corporate entities operating under TMX Finance, broadly known as TitleMax, for violating the financial rights of military families and other consumers in providing auto title loans. The CFPB found that TitleMax violated the Military Lending Act by extending prohibited title loans to military families and, oftentimes, by charging nearly three times more than legally permitted. The CFPB’s order ended TitleMax’s illegal activities and requires the company to pay more than $5 million in consumer relief and a $10 million civil money penalty. The same month, the CFPB permanently banned RMK Financial Corporation, which does business as Majestic Home Loans, from the mortgage lending industry. In 2015, the CFPB issued an agency order against RMK for, among other things, sending advertisements to military families that led the recipients to believe the company was affiliated with the U.S. government. Despite the 2015 order’s prohibition on these and other actions, the company engaged in a series of repeat offenses. In addition to the ban, RMK also is required to pay a $1 million penalty.
- Taking Action Against Bank of America for Illegally Charging Junk Fees, Withholding Credit Card Rewards, and Opening Fake Accounts: In July, the CFPB ordered Bank of America to pay more than $100 million to customers for systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, and misappropriating sensitive personal information to open accounts without customer knowledge or authorization. The Office of the Comptroller of the Currency (OCC) also found that the bank’s double-dipping on fees was illegal. Bank of America is required to pay $90 million in penalties to the CFPB and $60 million in penalties to the OCC.
- Taking Action Against Citibank for Intentional, Illegal Discrimination Against Armenian Americans: In November, the CFPB ordered Citi to pay $25.9 million in fines and consumer redress for intentionally and illegally discriminating against credit card applicants the bank identified as Armenian American. From 2015 through 2021, Citi singled out for discrimination applicants for certain credit card products, based on their surnames, whom it thought were of Armenian descent. Citi supervisors conspired to hide the discrimination by instructing employees not to discuss the discriminatory practices in writing or on recorded phone lines. Citi employees also lied about the basis of denial, providing false reasons to denied applicants. Under the order, Citi is required to pay $1.4 million to harmed consumers along with a $24.5 million penalty.
- Taking Action to Stop Loan Churning: In August, the CFPB sued Heights Finance Holding Company, formerly known as Southern Management Corporation, for illegally churning loans to harvest hundreds of millions in loan costs and fees. The CFPB alleges Heights coerces distressed borrowers into fee-laden cycles of reborrowing, incentivizes its employees to push refinances on consumers, targeting customers for their likelihood of refinancing and falsely marketing refinances as fresh starts.
- Taking Action Against TransUnion for Illegal Rental Background Check and Credit Reporting Practices: In October, the CFPB along with the Federal Trade Commission (FTC) took action against a rental screening subsidiary of the TransUnion conglomerate for violations of the Fair Credit Reporting Act. The agencies allege the TransUnion company failed to take steps to ensure the rental background checks that landlords use to decide who gets housing were accurate. The company also withheld from renters the names of third parties that were providing the inaccurate information. The resulting court order requires the TransUnion company to pay $15 million for its lawbreaking behavior and to make significant improvements to how it reports evictions. The CFPB, separately, also ordered TransUnion to pay $8 million in redress and penalties for failing to timely place or remove security freezes and locks on the credit reports of tens of thousands of consumers and for falsely telling certain consumers that their requests had been successful when they had not.
- Stopping unlawful junk advance fees for credit repair services: In August, the CFPB entered into a settlement with a ring of corporate entities operating some of the largest credit repair brands in the country, including Lexington Law and CreditRepair.com. The settlement follows a federal court ruling that the companies violated federal law by collecting illegal advance fees for credit repair services. The settlement imposes a $2.7 billion judgment against the companies. The order also bans the companies from telemarketing credit repair services for 10 years.
Growing our capacity in 2023 and the year ahead
2023 also marked the first time that a team of technologists dedicated to enforcement matters joined the CFPB. This cross-disciplinary team of technology experts has increased the Bureau’s capacity to enforce the law when emerging technologies harm consumers.
And our work doesn’t stop there. The CFPB recently announced that we are significantly expanding our enforcement capacity in 2024 to build on our achievements so far. These positions include enforcement attorneys as well as non-attorney positions, including analysts, paralegals, e-litigation support specialists, economists, and more. These roles are located in our Washington, D.C. headquarters, and for many, in our regional offices in San Francisco, New York, Chicago, and Atlanta.
We will be holding an information session on January 30 for potential applicants to learn more about the Office of Enforcement’s work and our upcoming career opportunities. Click here to register and visit our career page for more information about jobs at the CFPB.