CFPB Returns Millions To Consumers Using Supervisory Authority

On March 8, 2016, the Consumer Financial Protection Bureau (CFPB) announced that, through its supervisory authority, it recovered $14.3 million for approximately 228,000 consumers. This recovery spans CFPB work completed in the last three months of 2015.

Using its supervisory and examination authority, the CFPB discovered violations in the money transmitter, student lending, and debt collection markets. The CFPB disclosed these findings in its latest supervisory highlights report.

Specifically, the CFPB examiners found that student loan servicers engaged in unfair practices by automatically defaulting on private student loans and demanding that the entire loan be paid at once. The CFPB finds these "auto defaults" to be unfair. The CFPB also found that student loan debt collectors used false, deceptive, or misleading representations when attempting to collect debt by threatening garnishment against borrowers not eligible for garnishment.