October 1, 2016 – March 31, 2017 Semi-annual report of the Consumer Financial Protection Bureau Message from Richard Cordray Director of the CFPB At the Consumer Financial Protection Bureau, we are deeply committed to achieving our mission as the nation’s first federal agency whose sole focus is protecting consumers in the financial marketplace. Financial products like mortgages, credit cards, and student loans involve some of the most important financial transactions in people’s lives. Through the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau was created to stand on the side of consumers and ensure they are treated fairly in the financial marketplace. Since we opened our doors, we have been focused on making consumer financial markets work better for the American people, and helping consumers improve their financial lives. In this, our eleventh Semi-Annual Report to Congress, we provide an update on the Bureau’s efforts to achieve this vital mission. Through fair rules, consistent oversight, appropriate enforcement of the law, and broad-based consumer engagement, the Bureau is helping to restore American families’ trust in consumer financial markets, protect consumers from improper conduct, and ensure access to fair, transparent, and competitive markets. In the six months covered by this report, our supervisory actions resulted in financial institutions providing more than $6.2 million in redress to over 16,549 consumers. During that timeframe we also announced orders through enforcement actions for approximately $200 million in total relief for consumers who fell victim to various violations of consumer financial protection laws, along with over $43 million in civil money penalties. We brought numerous enforcement actions for various violations of the Dodd-Frank Act and other laws, including actions against three reverse mortgage companies—Aegean Financial, American Advisors Group, and Reverse Mortgage Services; Mastercard and UniRush; CitiFinancial Servicing, 1 SEMI-ANNUAL REPORT OF THE CFPB, SPRING 2017 CitiMortgage; and all three major credit reporting agencies—Equifax, TransUnion and Experian. The Bureau also issued final rules on Regulation E (prepaid accounts under the Electronic Fund Transfer Act and electronic fund transfers) and Fair Credit Reporting Act Disclosures. As a data-driven institution, the Bureau published several reports and other publications during this reporting period. These reports highlighted several important topics in the consumer finance area, including reports on Prepaid Card Fee Disclosures; Online Debt Sales; a Bureau survey on Consumer Views on Debt; and two editions of the Bureau’s Supervisory Highlights. The premise that lies at the very heart of our mission is that consumers should have someone standing on their side to ensure that they are treated fairly in the financial marketplace. From July 21, 2011, through March 31, 2017, the CFPB has handled over 1.1 million consumer complaints about credit reporting, debt collection, money transfers, bank accounts and services, credit cards, mortgages, vehicle loans, payday loans, student loans, and certain other consumer financial products or services, including prepaid cards, debt settlement services, credit repair services, and pawn and title loans. Information about consumer complaints sent to companies for response is available to the public through our public Consumer Complaint Database, launched in June 2012. We have published nearly 750,000 complaints that have been sent to companies for response. We do this not only to empower consumers and inform the public, but also so that companies can learn from the data and improve their own compliance and customer service operations. The progress we have made has been possible thanks to the engagement of hundreds of thousands of Americans who have utilized our consumer education tools, submitted complaints, participated in rulemakings, and told us their stories through our website and at numerous public meetings from coast to coast. We have also benefited from an ongoing dialogue and constructive engagement with the Bureau’s advisory groups, with the institutions we supervise, with community banks and credit unions with whom we regularly meet, and with consumer advocates throughout the country. Our progress has also resulted from the extraordinary work of the Bureau’s employees—dedicated public servants who are committed to promoting a healthy consumer financial marketplace. Each day, we work to accomplish the goals of renewing people’s trust in the marketplace and ensuring that markets for consumer financial products and services are fair, transparent, and competitive. These goals not only support consumers in all financial circumstances, but also help responsible businesses compete on a level playing field, 2 SEMI-ANNUAL REPORT OF THE CFPB, SPRING 2017 which helps to reinforce the stability of our economy as a whole. In the years to come, we look forward to continuing to fulfill the vision of an agency dedicated to ensuring a consumer financial marketplace marked by transparency, responsible practices, sound innovation, and excellent customer service. Sincerely, Richard Cordray Director 3 SEMI-ANNUAL REPORT OF THE CFPB, SPRING 2017 Table of contents Message from Richard Cordray ................................................................................. 1 Table of contents......................................................................................................... 4 1. Executive summary .............................................................................................. 8 1.1 Listening to consumers ............................................................................. 9 1.2 Delivering for American consumers and leveling the playing field ....... 10 1.3 Building a great institution ..................................................................... 14 2. Consumer challenges in obtaining financial products and services ............................................................................................................... 15 2.1 Consumer concerns .................................................................................15 2.2 How the CFPB handles complaints ........................................................ 20 2.3 Shopping challenges ............................................................................... 39 2.4 Student banking…………………………………………………………………………..39 3. Delivering for American consumers and leveling the playing field .............. 42 3.1 Resources for consumers ........................................................................ 42 3.2 Outreach .................................................................................................. 52 3.3 Partnerships ............................................................................................ 53 4. Regulations and guidance ................................................................................. 59 4.1 Implementing statutory protections ...................................................... 59 4 SEMI-ANNUAL REPORT OF THE CFPB, SPRING 2017 4.2 Addressing longstanding consumer protection and regulatory burden concerns in other markets ...................................................................... 62 4.3 Facilitating implementation of new regulations .................................... 65 5. Supervision ......................................................................................................... 70 5.1 Supervisory activities .............................................................................. 70 5.2 Supervisory guidance ............................................................................... 71 5.3 2016 Annual Report on the Secure and Fair Enforcement for Mortgage Licencing Act of 2008 (SAFE Act) ......................................................... 72 5.4 Coordination and Information Sharing with other Government Agencies .................................................................................................. 74 5.5 Examiner training and commissioning .................................................. 75 5.6 Conducting investigations ...................................................................... 75 6. Enforcement actions .......................................................................................... 77 7. Fair lending ....................................................................................................... 101 7.1 Fair lending supervision and enforcement .......................................... 102 7.2 Interagency fair lending coordination and outreach ............................ 113 7.3 Home Mortgage Disclosure Act ............................................................. 115 7.4 ECOA and Regulation B ......................................................................... 116 8. Building a great institution: Update ................................................................ 118 8.1 Open government .................................................................................. 118 9. Budget ............................................................................................................... 121 9.1 How the CFPB is funded ........................................................................ 121 10. Office of Minority and Women Inclusion ........................................................ 129 10.1 Recruiting and hiring ............................................................................ 129 10.2 Staff