Pub. 9 2019-2020 Issue 4

16 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org A Review of the CFPB’s Latest Supervisory Highlights BY VICTORIA E. STEPHEN T he Consumer Financial Protection Bureau (CFPB) recent- ly released its summer 2019 Supervisory Highlights, which includes key findings from the CFPB’s exams for the most part between December 2018 to March 2019. In each edition, the Bureau chooses the areas where it has seen the most super- visory activity, and for this one, it highlighted auto loan origina- tion, credit card account management, debt collection practices, FCRA information furnishing, and mortgage loan origination. Auto Loan Origination In the auto loan origination space, the CFPB called out lenders who sell “GAP insurance” to consumers with low loan- to-value ratios because they likely would not benefit from the additional coverage. If the vehicle were stolen or damaged, the difference in the amount owed on the loan and the amount obtained from the insurance company is likely to be low. As such, the Bureau found that consumers showed “that they lacked an understanding of a material aspect of the product” by purchasing a product they would not benefit from, and that lenders had enough information to know this and sold the insurance to them anyway. This was considered an “abusive” practice because it took “unreasonable advantage” of this lack of understanding, and needless to say, a lot of GAP insurance was refunded.