Kite Consulting Services

09/29/2022

CFPB Supervisory Examinations Find Violations of Federal Law by Student Loan Servicers and University-Owned Lenders
Blanket withholding of academic transcripts to pressure borrowers to pay cited as unlawful

WASHINGTON, DC — Today, the Consumer Financial Protection Bureau (CFPB) released a special edition of Supervisory Highlights on recent examination findings covering the practices of student loan servicers, and schools that lend to students directly. The exams found that these schools had improper blanket policies of withholding transcripts to force students to make payments. These findings come after the CFPB announced earlier this year that it would examine the operations of colleges that operate lending businesses. The CFPB’s exams also found that student loan servicers illegally hampered borrowers’ access to federal student loan payment relief and cancellation programs including Income-Driven Repayment, Public Service Loan Forgiveness and Teacher Loan Forgiveness. The CFPB directed servicers to act to remediate these issues.

“Americans must exercise their right to their educational data to obtain a job or transfer schools,” said CFPB Director Rohit Chopra. “Our examinations of lenders found that blanket policies to withhold transcripts can run afoul of the law.”

Transcript Withholding

Under the Consumer Financial Protection Act, Congress gave the CFPB supervisory authority over entities that originate private education loans, including institutional loans. The CFPB examines private student lenders of all sizes, including entities that operate school-based lenders that extend loans directly to students.

Many in-house lenders employ a practice of withholding transcripts when a student borrower has an outstanding debt. Transcript withholding is designed to gain leverage over borrowers and coerce them into making payments, as it is difficult to seek employment or transfer education credits to another school without an official transcript. Even when borrowers enter into payment agreements with a school, the transcript might not be released until the debt is paid in full.

The CFPB’s examinations found that the blanket withholding of transcripts to pressure borrowers is an abusive practice under the Consumer Financial Protection Act.

Servicers’ Unlawful Impediments to Borrower Benefit Programs

The examinations also found many cases where federal loan servicers improperly denied borrower applications for loan cancellation through Teacher Loan Forgiveness or Public Service Loan Forgiveness. Servicers illegally misrepresented borrowers’ eligibility dates and the number of payments the borrower needed to make to qualify for relief. Servicers also provided misinformation about borrowers’ entitlement to progress toward loan forgiveness during the pandemic payment suspension. The CFPB directed servicers to address consumer harm caused by these actions, and it will continue to monitor servicers’ practices to ensure that student loan borrowers are not illegally excluded from relief provided for them under federal law.

Separately, the CFPB reviewed the transfer of millions of borrower account records to different servicers, including the nine million borrower accounts transferred in July 2021 after the student loan servicers PHEAA and Granite State announced they were ending their contracts with the Department of Education. The CFPB partnered with the Department of Education and many state regulators in oversight of these account transfers to identify and address points of concern.

Read the Supervisory Highlights Student Loan Servicing Special Edition.

Students and their families can find help on how to tackle their student debt through the CFPB’s Paying for College suite of tools. For borrowers already repaying student loans, the CFPB has tools and resources to help them make important loan decisions. More information is available at consumerfinance.gov/students.

Student loan borrowers experiencing problems related to repaying student loans or debt collection can submit a complaint by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

# # #

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.

The CFPB's vision is a consumer finance marketplace that works for American consumers, responsible providers, and the economy as a whole.

09/28/2022

Long read! But if you or anyone you know use Regions Bank 👇🏼

The sad part is regions is not the only culprit who does this to consumers.

🏦🏦🏦🏦

CFPB Orders Regions Bank to Pay $191 Million for Illegal Surprise Overdraft Fees
Repeat offender will refund at least $141 million to customers and pay $50 million penalty

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) is ordering Regions Bank to pay $50 million into the CFPB’s victims relief fund and to refund at least $141 million to customers harmed by its illegal surprise overdraft fees.

From August 2018 through July 2021, Regions charged customers surprise overdraft fees on certain ATM withdrawals and debit card purchases. The bank charged overdraft fees even after telling consumers they had sufficient funds at the time of the transactions. Financial regulators have long cautioned banks against charging this type of overdraft fee. The CFPB also found that Regions leadership knew about and could have discontinued its surprise overdraft fee practices years earlier, but they chose to wait while Regions pursued changes that would generate new fee revenue to make up for ending the illegal fees.

“Regions Bank raked in tens of millions of dollars in surprise overdraft fees every year, even after its own staff warned that the bank’s practices were illegal,” said CFPB Director Rohit Chopra. “Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it. We have more work to do to change this mentality.”

Regions Bank (NASDAQ:RF) is based in Birmingham, Ala., with more than $160 billion in consolidated assets. It operates approximately 1,700 retail branches and 2,000 ATMs across 16 states. It offers and provides an array of financial products and services to consumers, including deposit accounts, credit cards, and lines of credit. Overdraft and non-sufficient funds fees are a core part of Regions Bank’s profit model. In fact, overdraft and non-sufficient funds fees were 17.7% of Regions Bank’s 2019 non-interest income.

This is not the first time Regions has been caught engaging in illegal overdraft abuses. In 2015, the CFPB ordered Regions to refund $49 million to consumers and pay a $7.5 million penalty for charging overdraft fees to consumers who had not opted into overdraft protection and to consumers who had been told they would not be charged overdraft fees.

Surprise Overdraft Fees

The CFPB has observed that in many circumstances, financial institutions have created serious obstacles to consumers taking steps to anticipate and avoid overdraft fees. For instance, as in the case of Regions, the bank’s unintelligible and manipulative processes meant that even consumers closely monitoring their account balances and carefully calibrating their spending in accordance with the balances shown could not reasonably avoid surprise overdraft fees. Surprise overdraft fees can be especially harmful because customers may unknowingly rack up multiple overdraft fees on seemingly zero-risk transactions.

Regions charged a type of surprise overdraft fee known as an authorized-positive fee. As early as 2015, the CFPB, as well as other federal regulators, including the Federal Reserve, began cautioning financial institutions against charging certain types of authorized-positive fees, such as the ones Regions charged. In its Winter 2015 Supervisory Highlights, the CFPB described examination findings regarding unfair and deceptive practices in connection with authorized-positive fees. In July 2018, the Federal Reserve further explained that banks could identify and manage their legal risk by refraining from assessing such fees.

Regions Bank's Prolonged Unlawful Behavior

The CFPB found that from August 2018 through July 2021, Regions charged consumers approximately $141 million in unlawful authorized-positive fees. Specifically, Regions employed complex and counter-intuitive overdraft practices and manipulations such that its customers could not avoid the fees. Even Regions Bank’s own employees could not explain to customers why they incurred the overdraft fees.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order:

Requires Regions to provide at least $141 million in redress to affected consumers: Regions must refund at least $141 million in illegally assessed authorized-positive overdraft fees.
Bans Regions from charging authorized-positive fees: Regions is prohibited from charging authorized-positive overdraft fees.
Assesses a $50 million fine: Regions must pay a $50 million penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.
Read today's order.

The CFPB wishes to acknowledge the cooperation of its fellow federal regulators in this matter.

To learn more about overdraft fees and banks’ overdraft practices, read the agency’s December 2021 overdraft fee data point reports along with the agency’s recent overdraft fee blog, Banks’ overdraft/NSF fee revenues evolve along with their policies.

Consumers can submit complaints about Regions Bank, or about other financial institutions, products and services, by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected].



# # #

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit

The CFPB's vision is a consumer finance marketplace that works for American consumers, responsible providers, and the economy as a whole.

09/22/2022

Are you a small business owner or entrepreneur? If so! Have you properly built your business credit file SEPARATE from your SSN? If not we take the guesswork out of where to start and how to properly build it with just your EIN in our book! DM us for info on how to grab your copy today!

09/20/2022

We are always trying to create better ways to serve those who need credit services. 💥

Our digital store 📚 is almost ready and will begin having tools for those who are wanting to properly repair their credit or build their

We also have Credit Repair classes 🤓🏫 that allow you to work with me each month on not only repairing your credit but fully understanding the process. It's an extremely affordable one-time cost that will provide you with the tools to carry with you long after you're done with class. ☝️🏼

Our are also an added benefit to those who go through the monthly credit repair class.

09/20/2022

Farmer's Markets are a great way to save money on produce throughout the year.
Have you ever gone to your local Farmer's Market?

Book your Credit Consultation today!

👉🗓 www.calendly.com/rachelkcs 🗓 👈

Or call 844-386-KITE

09/19/2022

Happy Monday!

Here's our Credit Tip of the Day!

Budget for the unexpected. That might mean a meal on the go, new shoes, or an extra tank of gas for errands. Adding an "uncategorized" line to your budget can help manage those unexpected costs.

Do you have any questions about your credit?

Book your Credit Consultation today!

👉🗓 www.calendly.com/rachelkcs 🗓 👈

Or call 844-386-KITE

09/16/2022

Pick a day each week where you spend NO money! This is a great way to save a little extra!

Having thoughts about SAVING?

Book your Credit Consultation today!

👉🗓 www.calendly.com/rachelkcs 🗓 👈

Or call 844-386-KITE

09/15/2022

Cut down additional expenses where you can. This could be refinancing your home or vehicle, using coupons at fast food restaurants or the grocery store, or carpooling to save on gas.

Book your Credit Consultation today!

👉🗓 www.calendly.com/rachelkcs 🗓 👈

Or call 844-386-KITE

09/14/2022

Work toward additional income. This might be from a second job, reselling, or asking for a raise at work. Any additional income can cover those unexpected costs.

Book your Credit Consultation today and learn more!

👉🗓 www.calendly.com/rachelkcs 🗓 👈

Or call 844-386-KITE