CFPB Winter 2021 Supervisory Highlights Part I: Mortgage forbearances

I learned so much about the month of February this past week. First, it can (and did) snow in February. Second, when it snows, it’s a lot less playing in the snow and a lot more shoveling snow off my front stairs. Third, a groundhog decided that winter will continue for six more weeks. Finally, I learned that I strongly dislike groundhogs.

The Consumer Financial Protection Bureau (CFPB) released a special edition Winter 2021 Supervisory Highlights, focused on the prioritized assessments (PA) the bureau conducted regarding the COVID-19 pandemic. Prioritized assessments were high-level inquiries conducted in lieu of examinations, which allowed the CFPB to analyze COVID-19 related market developments and determine risk of consumer harm.

The CFPB found that financial institutions struggled with operational challenges, resulting in long hold times for consumers, inaccurate information provided to consumers, failure to send out timely disclosures, and inaccurate credit reporting. The highlights discuss the consumer risks the CFPB found regarding mortgage servicing, auto loan servicing, student loan servicing, credit card account management, consumer reporting and furnishing, debt collection, deposits, prepaid accounts, and small business lending. This blog will review the potential risks of customer harm the CFPB found specifically related to COVID-19 mortgage forbearances.

 

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