CFPB's Acting Director Uejio Sends Message to SEFL Staff, Signaling Changes to Come

Yesterday, Consumer Financial Protection Bureau Acting Director Dave Uejio sent a note to employees in the Supervision, Enforcement, and Fair Lending (SEFL) division to communicate that there would be new priorities and a new vision of consumer protection coming soon. Here is the full text of the letter:

Hello all,

I am following up on my initial email reflecting the new priorities and focus of the CFPB. In particular, I would like to convey my broad vision for SEFL in the coming months.

But first, I want to thank everyone for their hard work during these trying times. I know it has been a tough year for everyone working and living through a pandemic, and that you all have pushed through despite tragedy and loss. This email conveys a change of direction, but it is not intended as a criticism of how our professional team executed on the prior leadership’s direction.

As I noted in my first email, my priorities for the CFPB are (1) relief for consumers facing hardship due to COVID-19 and the related economic crisis, and (2) racial equity.

On COVID-19, we need to take swift action now, in order to make sure our actions help people in the middle of the crisis, rather than just cleaning up after the fact. As you know, protecting economically vulnerable consumers is core to the mission of the CFPB and a key reason why the agency was created. It is going to take urgent action for the CFPB to step up to this challenge.

One thing we can do immediately is focus our supervision and enforcement tools on overseeing the companies responsible for COVID relief. I am concerned about the findings described in last week’s Supervisory Highlights edition that companies are failing to properly administer relief through the crisis. In a series of Prioritized Assessments last year our examiners found the following:

• Mortgage servicers gave consumers incomplete and inaccurate information about CARES Act forbearances, failed to process forbearance requests, and collected and assessed late fees despite having approved forbearances.
• Servicers withdrew money even though consumers were in deferment.
• One student loan servicer denied thousands of forbearance extensions because the loan holder never responded.
• Companies across markets misreported accounts to credit bureaus and violated CARES Act amendments that added protections to the Fair Credit Reporting Act.
• Some banks set off stimulus payments and unemployment insurance benefits in order to cover bank fees and other debts.
• Examiners found that the widely used policy of banks only taking PPP applications from pre-existing customers may have a disproportionately negative impact on minority-owned businesses.

These are just a few examples that show the types of harms consumers are suffering and the meaningful impact that strong oversight could have on the country’s recovery effort. Moving forward, the CFPB will take aggressive action to ensure that regulated companies follow the law and meet their obligations to assist consumers during the COVID-19 pandemic.

With that in mind, I have directed SEFL to always determine the full scope of issues found in its exams, systemically remediate all of those who are harmed, and change policies, procedures, and practices to address the root causes of harms. For the Prioritized Assessments that do not already do this, I want Supervision to follow up to ensure it is done, without conducting new follow-up exams. Companies that have not already received instructions from our examiners should expect to receive letters in the mail soon.

In some cases, penalties may be necessary. I have also directed SEFL to expedite enforcement investigations relating to COVID-19 so that we can take action now to ensure that industry gets the message that violations of law during this time of need will not be tolerated.

Over the coming weeks, we will also be reversing policies of the last administration that weakened enforcement and supervision. As of today, it is the official policy of the CFPB to supervise lenders with regard to the Military Lending Act. And we are planning to rescind public statements conveying a relaxed approach to enforcement of the laws in our care.

It’s also time for the CFPB to take bold and swift action on racial equity. I know this is close to the hearts of many of you. The country is in the middle of a long-overdue conversation about race, and as we all know, practices and policies of the financial services industry have both caused and exacerbated racial inequality. I am going to elevate and expand existing investigations and exams and add new ones to ensure we have a healthy docket intended to address racial equity. This of course means that fair lending enforcement is a top priority and will be emphasized accordingly. But we will also look more broadly, beyond fair lending, to identify and root out unlawful conduct that disproportionately impacts communities of color and other vulnerable populations.

The CFPB is uniquely positioned to help consumers in their time of need. I look forward to working with each of you to meet the moment.

Best,
Acting Director Uejio

It seems Acting Director Uejio is not planning to sit on the sidelines while waiting for President Biden's pick for permanent Director, Rohit Chopra, to be confirmed by the U.S. Senate.