A recent series of CFPB consent orders should remind the mortgage industry to carefully monitor its advertising practices. The MAP Rule prohibits deceptive and misleading commercial communications regarding any term of any mortgage credit product. 12 CFR Part 1014. The three orders, which were entered with reverse mortgage companies, include almost $800,000 in civil penalties and require remediation. Each of the consent orders will remain in place for five years. Each of the orders was entered with the consent, but without any admission of liability, by the reverse mortgage company.
Significantly for the mortgage industry, the consent orders provide insight into the CFPB’s expectations for compliance management as to advertising policies for mortgage products. The Orders require each respondent to develop a comprehensive compliance plan designed to ensure that each Respondent’s advertising complies with all applicable laws and regulations.
At a minimum, the Orders suggest a Compliance Management System should include:
Mortgage industry players should carefully review their current policies and advertisements to ensure their compliance with the MAP Rule and are reminded to also shore up their vendor management in this regard, as well.
Caren Enloe leads Smith Debnam’ s consumer financial services litigation and compliance group. In her practice, she defends consumer financial service providers and members of the collection industry in state and federal court, as well as in regulatory matters involving a variety of consumer protection laws. Caren also advises fintech companies, law firms, and collection agencies regarding an array of consumer finance issues. An active writer and speaker, Caren currently serves as chair of the Debt Collection Practices and Bankruptcy subcommittee for the American Bar Association’s Consumer Financial Services Committee. She is also a member of the Defense Bar for the National Creditors Bar Association, the North Carolina State Chair for ACA International’s Member Attorney Program and a member of the Bank Counsel Committee of the North Carolina Bankers Association. Most recently, she was elected to the Governing Committee for the Conference on Consumer Finance Law. In 2018, Caren was named one of the “20 Most Powerful Women in Collections” by Collection Advisor, a national trade publication. Caren oversees a blog titled: Consumer Financial Services Litigation and Compliance dedicated to consumer financial services and has been published in a number of publications including the Journal of Taxation and Regulation of Financial Institutions, California State Bar Business Law News, Banking and Financial Services Policy Report and Carolina Banker....LEARN MORE