Bucket List Actions of the Last Independent Consumer Protection Agency: We’re On Our Own, Now

The following “Press Release” was received, today:

In short, the above announcement marks the end of independent consumer protection from the Federal Government. Consumers are on their own to deal with corporate malfeasance and crime. It is unclear if the regulatory actions currently being pursued by the agency will be continued. Given recent actions by the Federal Government, it is likely they will not. Regardless of how the agency is transformed going forward, it is clear that consumers should expect less to no assistance when faced with malfeasance and crimes perpetrated by our nation’s financial and corporate sectors. Corporations have gone from “too big to fail” to “too powerful to police”.

Below, please find the research and regulatory actions taken up to today’s announcement. They may be the last examples of what kinds of protections consumers have lost (titles are links to more information):

CFPB Research Reveals Heavy Buy Now, Pay Later Use Among Borrowers with High Credit Balances and Multiple Pay-in-Four Loans

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts

CFPB Takes Action to Address Illegal Debt Collection Practices by the National Collegiate Student Loan Trusts

CFPB Orders Honda’s Auto Financing Arm to Pay $12.8 Million for COVID-19 and Other Credit Reporting Failures

CFPB Orders Equifax to Pay $15 Million for Improper Investigations of Credit Reporting Errors

CFPB Finds More Vehicles Eligible for Repossession Than Pre-Pandemic

CFPB Report Finds Continued Challenges for Households that Rent

CFPB Finds Servicemembers Pay More in Auto Lending Market

CFPB Orders Wise to Pay $2.5 Million for Illegal Remittance Practices

---

FOR IMMEDIATE RELEASE:
January 13, 2025

CFPB Research Reveals Heavy Buy Now, Pay Later Use Among Borrowers with High Credit Balances and Multiple Pay-in-Four Loans

More than 60 percent of users had simultaneous loans, borrowers held higher balances on other credit lines, and most loans went to consumers with subprime or lower credit scores

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released a study of Buy Now, Pay Later (BNPL) borrowers, finding that more than one-fifth of consumers with a credit record used BNPL loans in 2022, with most of those consumers having subprime or deep subprime credit scores. The CFPB research also revealed that more than three-fifths of BNPL borrowers held multiple simultaneous BNPL loans at some point during the year, and one-third had loans from multiple providers. BNPL borrowers were also more likely than other consumers to have higher balances on other unsecured credit lines such as credit cards. Because lenders do not typically report BNPL loans to nationwide consumer reporting companies, data about BNPL use—especially about borrowers with multiple loans and on total consumer debt balances—is limited. Today’s study helps fill the data gap by pairing a matched sample of BNPL applications from six large firms with deidentified credit records.

BNPL credit is a type of deferred payment option that generally allows the consumer to split a purchase into smaller installments, typically four or fewer, often with a down payment due at checkout. The application process is quick, involving relatively little information from the consumer, and the product often comes with no interest. Lenders have touted BNPL as a safer alternative to traditional credit card debt, along with its ability to serve consumers with limited or subprime credit histories.

To better understand the emerging BNPL market, the CFPB issued market monitoring orders in March 2023 to collect information from several companies offering no-interest, pay-in-four BNPL loans, including Affirm, Afterpay, Klarna, Paypal, Sezzle, and Zip. The CFPB matched the loan-level and deidentified consumer information it received with consumer credit records to study the prevalence of BNPL use. Today’s report finds that, in 2022:

• More than one-fifth of consumers used BNPL: Among consumers with a credit record, 2 percent financed at least one purchase with a BNPL loan, up from 17.6 percent in 2021. About 20 percent of borrowers in 2022 were heavy users originating more than one BNPL loan on average each month, an increase from 18 percent in 2021. The average number of originations per borrower increased from 8.5 to 9.5.
• Most BNPL borrowers took out multiple simultaneous BNPL loans: Approximately 63 percent of borrowers originated multiple simultaneous loans at some point during the year, and 33 percent took out loans from multiple BNPL lenders.
• Nearly two-thirds of BNPL loans went to borrowers with lower credit scores: Among these applicants with subprime or deep subprime credit scores, BNPL lenders approved 78 percent of loans in 2022.
• BNPL borrowers were more likely to hold higher balances on other credit accounts: These borrowers held higher balances of other unsecured consumer debt, including personal loans, retail loans, student loans, credit cards, and subprime alternative financial services lenders. Before first-time BNPL use, consumers’ average credit card utilization rates increased, suggesting that less available credit card liquidity may encourage consumers to use BNPL.
• Younger borrowers held more BNPL debt as a percentage of their total consumer debt: Among borrowers ages 18-24, BNPL purchases made up 28 percent of total unsecured consumer debt compared to an average of 17 percent among borrowers of all age groups, during the months in which they borrowed.

Read today’s report, Consumer Use of Buy Now, Pay Later and Other Unsecured Debt.

Today’s report builds on previous CFPB work related to BNPL lending. In May 2024, the CFPB issued an interpretive rule confirming that BNPL lenders must provide consumers some key legal protections and rights that apply to conventional credit cards. Previously, in March 2023, the CFPB published research about BNPL borrowers based on CFPB survey data, and in September 2022, the CFPB released findings based on an earlier market monitoring inquiry of BNPL lenders.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---

FOR IMMEDIATE RELEASE:
January 14, 2024

CFPB Sues Capital One for Cheating Consumers Out of More Than $2 Billion in Interest Payments on Savings Accounts

Bank unlawfully misled consumers about its 360 Savings accounts and obscured its higher-interest savings product from them

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) sued Capital One, N.A., and its parent holding company, Capital One Financial Corp., for cheating millions of consumers out of more than $2 billion in interest. The CFPB alleges that Capital One promised consumers that its flagship “360 Savings” account provided one of the nation’s “best” and “highest” interest rates, but the bank froze the interest rate at a low level while rates rose nationwide. Around the same time, Capital One created a virtually identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest—at one point more than 14 times the 360 Savings rate. Capital One did not specifically notify 360 Savings accountholders about the new product, and instead worked to keep them in the dark about these better-paying accounts. The CFPB alleges that Capital One obscured the new product from its 360 Savings accountholders and cost millions of consumers more than $2 billion in lost interest payments. The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund.

“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB Director Rohit Chopra. “Banks should not be baiting people with promises they can’t live up to.”

Capital One, N.A. is a national bank with more than $480 billion in assets and is a wholly owned subsidiary of Capital One Financial Corp. (NYSE: COF). Both entities are headquartered in McLean, VA. Capital One offers multiple deposit account products.

In 2012, Capital One acquired online bank ING Direct USA, including its online savings account product, “ING Direct,” which was known for having higher-than-average interest rates. In 2013, Capital One rebranded “ING Direct” as “360 Savings,” and started offering 360 Savings accounts to the general public.

Capital One marketed its 360 Savings account as a “high interest” account with a variable interest rate that was “one of the nation’s” “top,” “best,” and “highest,” and would earn much more interest than the average savings account. It also assured former ING Direct savings accountholders that, with 360 Savings, they would “still have great rates.” However, from late 2019 to mid-2024, Capital One lowered and then froze the 360 Savings account rate to just 0.30%, even as rates increased nationwide. In contrast, starting in early 2022, Capital One increased the 360 Performance Savings account rate. In fact, the rate went from 0.40% in April 2022 to 3.30% as of January 2023, and 4.35% as of January 2024.

The CFPB alleges that Capital One schemed to keep 360 Savings accountholders in their lower-yielding accounts by obscuring 360 Performance Savings’ existence as a distinct product with a higher rate from 360 Savings accountholders. For example, Capital One named and marketed the two products similarly; it eliminated nearly all references to the 360 Savings account product on its website and replaced them with references to the essentially identical 360 Performance Savings account, without notice that 360 Savings continued to exist as a distinct product; it excluded 360 Savings accountholders from a marketing campaign advertising 360 Performance Savings to Capital One’s other existing customers; and it forbade its employees from proactively telling 360 Savings accountholders about 360 Performance Savings. Specifically, the CFPB alleges that Capital One:

• Misled consumers about “high interest” accounts: Capital One illegally deceived consumers and Capital One, N.A. violated the Truth in Savings Act by representing that 360 Savings provided a variable interest rate that was “one of the nation’s” “top,” “best,” and “highest,” and would earn much more interest than the average savings account.
• Kept consumers in the dark to maintain a two-tier system: Capital One misrepresented to existing customers that its 360 Savings account was and would be its only 360 high-interest savings product with the features, terms, and conditions of 360 Savings and obscured from those customers its newer, much-higher-interest 360 Performance Savings accounts, which otherwise had all the same terms, conditions, and features of 360 Savings. Capital One used 360 Performance Savings to attract new depositors without paying existing depositors the interest they were promised. Capital One avoided paying more than $2 billion in additional interest to millions of customers because of these actions.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including the Truth in Savings Act. It also has the authority to enforce the Consumer Financial Protection Act’s prohibitions on unfair, deceptive, or abusive acts or practices. The CFPB seeks to stop Capital One’s unlawful conduct, provide redress for harmed consumers, and impose civil money penalties, which would be paid into the CFPB’s victims relief fund.

Read today’s complaint.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---

FOR IMMEDIATE RELEASE:
January 16, 2025

CFPB Takes Action to Address Illegal Debt Collection Practices by the National Collegiate Student Loan Trusts

Trusts will pay $2.25 million in compensation to harmed student borrowers

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) took action to resolve its case against the National Collegiate Student Loan Trusts for unlawfully filing defective debt collection lawsuits to collect on private student loan debt. The CFPB and the Trusts filed a proposed stipulated judgment that, if entered by the court, would require the Trusts to pay $2.25 million in redress to student borrowers who were harmed. Today’s action follows a March 2024 ruling by the United States Court of Appeals for the Third Circuit that the Trusts are covered persons under the Consumer Financial Protection Act. The National Collegiate Student Loan Trusts had previously claimed that, as trusts, they were not covered under the Consumer Financial Protection Act. In December, the Supreme Court declined to hear the Trusts’ appeal, leaving the Third Circuit decision in place.

During the leadup to the financial crisis, there was a boom in subprime-style student lending. Student lenders worked with investment bankers to turn student loans into securities. The National Collegiate Student Loan Trusts are an example of this. The Trusts are a group of fifteen securitization trusts organized under Delaware law that acquire, pool, and securitize student loans, which they then service.

In 2017, the CFPB filed a lawsuit alleging that the National Collegiate Student Loan Trusts, among other things, brought improper debt collection lawsuits. Specifically, the CFPB alleges that the National Collegiate Student Loan Trusts’ subservicers, acting on behalf of the Trusts:

• Sued consumers for debts the Trusts could not prove were owed: The Trusts unlawfully filed thousands of cases although they did not have or could not find the documentation necessary to prove either that they own the loans or that the consumer owed the debt.
• Filed false and misleading affidavits: In numerous instances, affiants claimed personal knowledge of the student loan debt they did not have. In some cases, the Trusts misrepresented that affidavits were properly notarized when they were, in fact, not.
• Attempted to collect after the statute of limitations expired: The Trusts unlawfully misrepresented that they had a right to collect time-barred debts after the statutes of limitations had expired.

The CFPB also alleges that the National Collegiate Student Loan Trusts engaged in unfair practices by filing collections lawsuits without the intent or ability to prove the claims, if contested.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including by engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order, if entered by the court, requires National Collegiate Student Loan Trusts to:

• Pay $2.25 million redress to consumers: The funds will be paid to the CFPB for the purpose of providing relief to borrowers who were harmed.
• Stop collecting on certain debts covered by the lawsuit: The Trusts must take steps to end certain pending debt collection lawsuits involving time-barred debt or where necessary documentation cannot be located, and to otherwise cease debt collection activities related to debt identified in those lawsuits.

Read today’s proposed stipulated final judgment.

In May 2024, the CFPB separately took action against the National Collegiate Student Loan Trusts and Pennsylvania Higher Education Assistance Agency (PHEAA) for allegedly failing to respond to borrowers seeking relief from student loan payments, including during the COVID-19 national emergency.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---

FOR IMMEDIATE RELEASE:
January 17, 2025

CFPB Orders Honda’s Auto Financing Arm to Pay $12.8 Million for COVID-19 and Other Credit Reporting Failures

Auto lender wrongfully reported Honda and Acura drivers as delinquent

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the American Honda Finance Corporation to pay $12.8 million for reporting inaccurate information that affected the credit reports of 300,000 people who drive Honda and Acura vehicles. During the COVID-19 pandemic, Honda Finance deferred certain vehicle loan payments. However, the CFPB found that the company told credit reporting companies that borrowers were delinquent when they should have been reported as current. The CFPB’s investigation also found multiple other credit furnishing accuracy and dispute investigation failures. The CFPB is ordering the company to pay $10.3 million in redress to harmed customers and to pay a $2.5 million civil money penalty.

“Honda Finance used sloppy practices that smeared the credit reports of hundreds of thousands of its customers,” said CFPB Director Rohit Chopra. “False accusations on a credit report can have serious implications for Americans seeking a job, housing, or a loan.”

Honda Finance is a nonbank automotive finance company for American Honda Motor Co., Inc., which is the sole authorized distributor of Honda and Acura motor vehicles in the United States. Honda Finance is headquartered in Torrance, California. Honda Finance is a wholly owned subsidiary of American Honda Motor. Honda Finance’s primary business is the purchase and servicing of loans and leases arranged by Honda and Acura dealerships. As part of their business, Honda sends data about borrowers that appears on their credit reports.

The CFPB found that Honda Finance violated the Fair Credit Reporting Act. Honda Finance furnished false and harmful information that ended up on borrowers’ credit reports. The company also failed to conduct appropriate   investigations of customer disputes. Specifically, the company harmed consumers by:

• Damaging borrowers’ credit reports during a national emergency: During the COVID-19 crisis, Honda Finance allowed consumers to defer payments and promised to continue reporting those consumers as current to credit reporting companies. Instead, Honda Finance reported those consumers as delinquent when they did not make payments that were not required during the deferral period. Further, Honda Finance continued furnishing inaccurate information even after determining several types of information was inaccurate. These actions harmed approximately 300,000 consumers.
• Failing to investigate disputes: Honda Finance failed to properly investigate disputes about information it furnished to credit reporting companies. Additionally, they failed to send the results of investigations to credit reporting companies and consumers, when required.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including those violating the Fair Credit Report Act and engaging in unfair, deceptive, or abusive acts or practices.  The CFPB’s order requires Honda Finance to:

• Pay $10.3 million to   harmed consumers: Honda Finance must pay $10.3 million in redress to consumers and take steps to correct its prior erroneous reporting.
• Pay a $2.5 million fine: Honda will pay a $2.5 million penalty to the CFPB’s victims relief fund.

Read today’s order.

The CFPB has taken a previous enforcement action against Honda Finance. In 2015, the CFPB and Department of Justice took action against Honda Finance for illegal discrimination. The company charged African American, Hispanic, and Asian and Pacific Islander borrowers higher dealer markups for their auto loans than non-Hispanic white borrowers. These markups were without regard to the creditworthiness of the borrowers. Honda Finance agreed to pay $24 million in redress for violations of the Equal Credit Opportunity Act.

The CFPB has also taken a series of actions to ensure that credit reports are accurate and that consumers can dispute false information. The CFPB issued orders against two other vehicle finance subsidiaries, Hyundai and Toyota. The CFPB has also ordered Equifax to pay $15 million for failing to conduct adequate investigations of disputed information in credit reports. Earlier this month, the CFPB sued Experian for not properly investigating disputes and failing to remove errors on consumers’ credit reports.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---

CFPB Orders Equifax to Pay $15 Million for Improper Investigations of Credit Reporting Errors

Equifax failed to conduct adequate investigations of disputed information in credit reports

JAN 17, 2025

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) took action against Equifax, the nationwide consumer reporting agency, for its failure to conduct proper investigations of consumer disputes. The CFPB found Equifax ignored consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores. The order requires Equifax to comply with federal law, and Equifax must pay a $15 million civil money penalty, which will be deposited into the CFPB’s victims relief fund.

“Equifax failed in its basic duty to investigate and resolve consumer disputes about inaccurate information on their credit reports,” said CFPB Director Rohit Chopra. “Today’s order requires Equifax to pay a civil penalty and follow federal laws on handling credit reporting disputes.”

Equifax Inc. (NYSE: EFX) is a nationwide consumer reporting agency with headquarters in Atlanta, Georgia. Equifax is the parent company to Equifax Information Services LLC, and is one of the three major consumer reporting agencies in the United States. It aggregates data about most adult consumers and sells that data to its customers in the form of consumer reports that are used by lenders, employers, landlords, and others to make important decisions about consumers. Equifax processes approximately 765,000 disputes each month.

The Fair Credit Reporting Act (FCRA) requires consumer reporting agencies to investigate the accuracy of disputed information and take steps to ensure consumers’ credit reports are accurate. For example, consumer reporting agencies must provide notice of a consumer dispute to the furnisher who provided the disputed information, conduct reasonable investigations to determine whether the disputed information is inaccurate, and provide the results of the investigation to the consumer.

The CFPB found Equifax violated the FCRA’s requirements for investigating and processing consumer disputes and assuring maximum possible accuracy of information on its consumer reports. The CFPB also found that Equifax violated the law by using ineffective systems and flawed processes, and excessively deferring to furnishers to address disputes. Specifically, the CFPB found Equifax harmed consumers by:

• Failing to thoroughly investigate consumer disputes: Equifax’s process for submitting disputes limits the ability of consumers to fully and accurately describe their disputes. In many cases, Equifax also failed to consider relevant information submitted by consumers, sometimes not looking at the information at all. Then, after Equifax forwarded information about a dispute to a furnisher, it did not meaningfully consider whether the furnisher’s response made sense, sometimes ignoring information it had that contradicted the furnisher’s response. Finally, the resulting letters Equifax sent to consumers sometimes contained confusing or contradictory statements, such as both “this has been verified as accurate” and “this item has been deleted.”
• Putting previously deleted errors back on credit reports and failing to block identity- theft related information: Equifax did not have systems to detect information that was previously removed and block that information from again appearing on the consumer’s credit report. In addition, Equifax also had no process to identify situations where a consumer is forced to send another dispute about the same inaccurate information because Equifax failed to correct the information the first time, or because Equifax reported information that had previously been corrected. Equifax’s policies limited consumers’ ability to dispute inaccurate information being put on their credit report. Finally, Equifax reported credit information that it should have blocked because the information resulted from identity theft.
• Sharing inaccurate credit scores and data about consumers with lenders: Coding errors in Equifax’s internal software caused the company to miscalculate and share inaccurate credit scores for several hundred thousand consumers. The company also reported the same credit accounts multiple times for more than 50,000 consumers.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including the FCRA, and the prohibitions on unfair, deceptive, or abusive acts or practices under the CFPA.

The order requires Equifax to:

• Follow federal law on handling credit reporting data: Equifax must bring its dispute resolution processes into compliance with the FCRA and CFPA.
• Pay a $15 million penalty: Equifax will pay a $15 million civil penalty to the CFPB’s victims relief fund.

Read today’s order.

Learn more about credit reports and scores.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---

FOR IMMEDIATE RELEASE:
January 23, 2025

CFPB Finds More Vehicles Eligible for Repossession Than Pre-Pandemic

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) published a report showing that the rate of auto repossessions at the end of 2022 surpassed pre-pandemic levels. Additionally, lenders were increasingly more likely to use third parties, called forwarders, to manage the repossession process.  The use of a third party generally increases consumer costs. The CFPB analyzed data from nine major auto lenders covering accounts with activity between 2018 and 2022. This data show increasing consumer risk in the $1.64 trillion auto loan market.

“Supply chain shocks and higher interest rates drove up costs to purchase and finance a car,” said CFPB Director Rohit Chopra. “With outstanding auto loans exceeding a trillion dollars, it’s critical that borrowers can avoid the costly consequences of repossession.”

Auto loans represent one of the largest sources of consumer credit outside of mortgage lending, with more than 100 million active auto finance accounts and $63 billion in new monthly originations as of April 2024. When vehicles are repossessed, consumers often lose their primary transportation to work, may be required to repay outstanding balances plus repossession fees, and may see additional negative impacts to their credit scores.

Key findings in the report include:

• Vehicles eligible for repossession exceeded pre-pandemic levels: In the month of December 2022, 0.75% of all outstanding vehicle loans were assigned to repossession – a 22.5% increase from December 2019 (0.61%).
• Repossessions completed using forwarders had higher costs charged to borrowers: Lenders’ use of third-party repossession forwarding companies increased from 31% in January 2018 to 66% in December 2022. Average repossession costs charged to consumers were higher when a forwarder was used.
• Consumers still owed thousands after repossession: Consumers can continue to owe money on their vehicle even after it is repossessed and sold by the lender. The average outstanding balance for consumers that had an outstanding balance after repossession in December 2019 was more than $10,000. Following a brief drop, the average outstanding balance sharply increased and was more than $11,000 in December 2022.

Read today’s report, Auto Repossession Trends and Consumer Impact.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

---

FOR IMMEDIATE RELEASE:
January 28, 2025

CFPB Report Finds Continued Challenges for Households that Rent

Late payments decreased overall, but data reveal growing balances and increasing fees

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released two reports looking at national rental payment data from September 2021 to November 2024. The percentage of renters who paid late fees in the last year reached 23% in February 2023. While the rate declined to slightly less than 14% in November 2024, the CFPB’s analysis found that the median outstanding rental balance rose 60% between September 2021 and November 2024, suggesting increased financial distress among affected households. Renters who do pay late fees often pay multiple late fees in a year, and the average late fee is $85, up significantly from September 2021. Only about half of renters behind on their rent catch up in one month.  

For the 35% of American households that live in rental housing, rent is one of their largest expenses. Falling behind on rent payments often indicates financial stress and puts families at risk of eviction. While the data show that fewer renters are incurring late fees and that about 50% of renters who do incur a fee are able to bounce back to on-time payments, the data also reveal continued financial struggles for many renters. 

The CFPB found a significant portion of renters who incur an initial late fee struggle to recover. Just under 60% of those who incur any late fees experience two or more. More than 20% of renters with at least one late fee have five or more late fees in the last twelve months. Late fees have also risen, along with the median outstanding rental balance, have increased since 2021. Late fees have risen steadily since September 2021 to $85 in November 2024. The reported outstanding rental balance has increased sharply from $2,000 in September 2021 to $3,200 in November 2024. 

The CFPB’s reports also examine the incidence of non-sufficient funds fees and write-offs of unpaid amounts. 

Read the data spotlight.

Read the report.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372). 

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. 

---

FOR IMMEDIATE RELEASE:
January 29, 2025

CFPB Finds Servicemembers Pay More in Auto Lending Market

Military borrowers face larger loans, higher interest rates, and more costly add-on products

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) published a report showing that United States servicemembers pay higher costs and face greater financial risks than civilian borrowers when taking out credit to buy a car. The report analyzes more than 20 million auto loans originated between 2018 and 2022, and finds that servicemembers typically have larger loans, make smaller down payments, and ultimately shoulder higher monthly costs.

While servicemembers pay nearly the same for both new and used vehicles as civilian buyers do, servicemembers on average pay more in interest and fees than civilian borrowers do, and also make those higher payments for longer. Military borrowers are also less likely to make a downpayment, more likely to make a smaller downpayment, and more likely to make a negative equity trade-in. Because servicemembers are often required to have a personal vehicle for transportation in order to fulfill their military obligations, and because they may be young men and women far away from family supports, they may be especially vulnerable to overreaching lending practices and have fewer resources to draw upon.

Key findings in the report include:

• Servicemembers borrow more while putting less down: For new vehicles, servicemembers borrowed an average of $39,000 – over $2,200 more than civilians – while putting down about $1,100 less in down payments. For used vehicles, they financed $27,500 on average, which is almost $400 more than civilians.
• Military borrowers pay higher rates over longer terms: Servicemembers faced average annual percentage rates (APRs) 0.6 percentage points above civilian rates and longer loan terms. This has resulted in servicemembers’ monthly payments averaging $644 for new vehicles, nearly $20 more than for civilian borrowers and nearly $1,300 more over the life of the average new vehicle loan.
• Add-on products, including GAP products, increase costs further: Over 70% of servicemembers purchased add-on products and paid on average about $140 more for add-on products than civilians. Warranty, service, and maintenance plans were the most common and expensive category of add-on products purchased. The second most common was GAP products. Servicemembers’ purchase of GAP products increased sharply in 2020, after the Department of Defense changed its interpretation of the Military Lending Act.

Read today’s report, Auto Lending to Servicemembers.

The CFPB continues to protect servicemembers’ financial interests across markets. The CFPB recently ordered Navy Federal Credit Union to refund over $95 million in illegal overdraft fees charged to servicemembers, veterans, and their families. The CFPB took action against FirstCash and MoneyLion for charging servicemembers illegal and high interest in violation of the Military Lending Act. The CFPB’s research found that Reserve and National Guard members were forgoing an estimated $9 million annually by not receiving the interest rate reduction benefit provided by the Servicemembers Civil Relief Act. The CFPB also proposed a rule to protect servicemembers and other Americans from data brokers selling their sensitive personal information to scammers, stalkers, and foreign surveillance operations.

Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.

---

FOR IMMEDIATE RELEASE:
January 30, 2025

CFPB Orders Wise to Pay $2.5 Million for Illegal Remittance Practices

The company misled companies about fees and charges and failed to provide consumer disclosures

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today ordered the international remittance company Wise to pay nearly $2.5 million for a series of illegal actions, including advertising inaccurate fees and failing to properly disclose exchange rates and other costs. Wise allows customers to send, receive, and store remittances through a mobile app and prepaid accounts and debit cards. The CFPB found the company misled customers in the United States about its ATM fees and failed to properly disclose other fees. When people sent money that did not arrive on time, Wise failed to refund the remittance fees in the timeframe required by law. Overall, the company’s actions led to hundreds of thousands of dollars in harm to consumers. The CFPB is ordering Wise to pay approximately $450,000 in redress to harmed consumers and to pay a $2.025 million civil money penalty.

“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” said CFPB Director Rohit Chopra. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”

Wise PLC (LON: WISE) is a publicly traded global electronic money services provider. It is headquartered in the United Kingdom, and does business in the United States through Wise US, a wholly owned subsidiary. Wise US is a nonbank remittance transfer provider headquartered in New York and incorporated in Delaware. Wise US offers and provides consumers international money transfer services, known as remittance transfers, in 48 states, the District of Columbia, Guam, the U.S. Virgin Islands, and Puerto Rico. Wise US has more than three million customers in the U.S.

Wise does not have any physical storefronts in the U.S., and instead relies on a mobile app, along with its prepaid and debit cards. Wise offers U.S. consumers two products: Send Money (remittance transfers through its mobile app) and the Wise Account (a prepaid account product). Wise maintains U.S. bank accounts, which allows it to process transfers for U.S. customers by transferring funds from the United States to foreign countries and vice versa. Wise also facilitates transfers by U.S. customers that occur entirely outside of the United States. On the prepaid card, customers can store and send money in multiple currencies. A third product, a debit card, allows customers to spend money stored on the prepaid account.

The CFPB found that Wise violated the Consumer Financial Protection Act of 2010 by advertising inaccurate ATM fees and charges to U.S. customers. The CFPB also found that Wise violated the Electronic Fund Transfer Act in a variety of ways, such as failing to properly disclose exchange rates and failing to refund fees when funds were not available to the recipient on time. Specifically, the company harmed consumers by:

• Sending false advertisements: Wise sent multiple emails and blogs to its customers around the globe announcing lower ATM fees, free withdrawals, and other customer perks. Wise led customers in the U.S. to believe these perks applied to them, when they, in fact, did not. For instance, Wise said 80% of customers would pay lower ATM fees, however, few, if any, of those customers were U.S.-based. Likewise, U.S.-based customers were led to believe they would receive two free withdrawals of slightly more than $200 each. In reality, they only received two free withdrawals up to $100 each.
• Failing to appropriately disclose fees and other costs: Wise made a multitude of disclosure errors. These included failing to disclose accurate fees to consumers who funded prepaid accounts using a credit card through Apple Pay or Google Pay, failing to properly disclose exchange rates, failing to refund fees when funds were not available to the recipient by the date of availability, and failing to make other required disclosures.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial protection laws, including by engaging in unfair, deceptive, or abusive acts or practices. The CFPB also has the authority to enforce the Electronic Fund Transfer Act and its implementing Regulation E, including the Prepaid Rule and the Remittance Transfer Rule. The CFPB’s order requires Wise to:

• Pay approximately $450,000 to harmed consumers: The practices used by Wise resulted in thousands of customers losing money. For example, the company’s prepaid card violations resulted in at least 16,000 consumers being overcharged.
• Pay a $2.025 million fine: The company will pay a $2.025 million penalty to the CFPB’s victims relief fund.

Read today’s order.

Read more about remittance transfers.

Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

---