CFPB research identifies trends in the complaints they receive from consumers

The Consumer Financial Protection Bureau (CFPB) released a report last week that examines patterns in the consumer complaints that they receive. © Shutterstock The report, called “Consumer complaints throughout the credit life cycle, by demographic characteristics,” revealed some interesting trends. One of the findings was that complaints from wealthier communities and communities with higher percentages […]

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The Consumer Financial Protection Bureau (CFPB) released a report last week that examines patterns in the consumer complaints that they receive.

© Shutterstock

The report, called “Consumer complaints throughout the credit life cycle, by demographic characteristics,” revealed some interesting trends. One of the findings was that complaints from wealthier communities and communities with higher percentages of white, non-Hispanic residents were more frequently about loan origination and performing servicing.

In contrast, complaints from communities of color and lower-income communities were more frequently about credit reporting, identity theft, and delinquent servicing.

The findings are based on the nearly 1 million consumer complaints submitted to the CFPB between 2018 and 2020.

“Today’s report confirms that the experiences and concerns of communities, with consumer financial products and services, vary by race and wealth,” CFPB Acting Director Dave Uejio said. “Our consumer complaint data is a crucial tool for understanding varying consumer experiences, including across racial and economic divides.”

The report also found that Asian American and Pacific Islander communities had higher rates of submitting credit reporting complaints than predominantly white, non-Hispanic communities. However, they also had a lower share of delinquent servicing complaints.

Overall, complaints about loan originations increased by nearly 50 percent over the course of 2020, driven largely by mortgage complaints. This increase was centered in higher-income neighborhoods and neighborhoods with fewer people of color. Neighborhoods with the highest share of white, non-Hispanic consumers submit complaints about loan originations at more than twice the rate of neighborhoods with the highest share of Black consumers.

The findings from this research will help inform the CFPB’s work.

“The CFPB will continue its research into consumer complaint data as part of its larger commitment to put consumers, and their varying experiences with consumer financial products and services, at the foundation of all its work,” officials said.

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MBA looking to reduce the racial homeownership gap

The Mortgage Bankers Association (MBA) has introduced a new policy initiative seeking to reduce the racial homeownership gap.© Shutterstock The MBAʻs Building Generational Wealth Through Homeownership would provide industry leadership and direction regarding the targeted endeavor — supporting efforts to develop sustainable homeownership opportunities for communities of color while also spurring equitable and responsible minority […]

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The Mortgage Bankers Association (MBA) has introduced a new policy initiative seeking to reduce the racial homeownership gap.

© Shutterstock

The MBAʻs Building Generational Wealth Through Homeownership would provide industry leadership and direction regarding the targeted endeavor — supporting efforts to develop sustainable homeownership opportunities for communities of color while also spurring equitable and responsible minority borrower lending.

“Homeownership is often the largest source of intergenerational wealth for families. MBA’s new policy initiative serves as a perfect foundation to level the playing field,” Susan Stewart, 2021 MBA Chairman and CEO at SWBC Mortgage Corporation, said. “The mortgage industry has a responsibility to promote minority homeownership by partnering with key stakeholders to remove barriers and support financial education and counseling, with a goal to close the racial homeownership gap and increase generational wealth among minority households.”

MBA President and CEO Bob Broeksmit said the organization is positioned to harness internal and external resources to help more minority families become homeowners.

“Through industry advocacy and partnerships with housing experts, consumer groups, nonprofits, and civil rights organizations, our industry will focus on eliminating obstacles and shaping policy to promote and increase minority homeownership,” he said.

The Building Generational Wealth Through Homeownership stems from
CONVERGENCE, which was developed by the MBA’s Minority Homeownership Joint Task Force.

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Study looks at causes of auto insurance cost increases

The American Property Casualty Insurance Association (APCIA) maintains its recently composed white paper attributes increased claims costs and delays to rising auto accident frequency and auto insurance market severity.© Shutterstock Per the APCIA analysis, other contributing factors to insurance cost increases include the challenge of balancing vehicles and parts supply and demand amid the COVID-19 […]

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The American Property Casualty Insurance Association (APCIA) maintains its recently composed white paper attributes increased claims costs and delays to rising auto accident frequency and auto insurance market severity.

© Shutterstock

Per the APCIA analysis, other contributing factors to insurance cost increases include the challenge of balancing vehicles and parts supply and demand amid the COVID-19 pandemic.

“This new study highlights recent trends in the U.S. auto insurance market that are leading to increased claim costs and impacting consumers,” Karen Collins, assistant vice president, personal lines for APCIA, said. “There has been a rapid rise in the number of auto accidents and in the severity of accidents. At the onset of the pandemic, there was an initial decline in the number of miles driven. However, that quickly changed as we emerged from the stay-at-home orders and Americans are now driving more. In fact, driving has returned to near pre-pandemic levels.”

Per the APCIA, driving behavior is increasingly riskier and the nation’s roads are more dangerous although there is greater access to improved vehicle technology and a temporary drop in traffic congestion.

Additionally, the white paper found that the number of auto crashes has risen and there has been a rise in medical care costs. Also, it said the nation has experienced significant vehicle shortages and major delays in auto repairs.

“With data showing a sharp rise in the cost of auto insurance claims during 2021, this has a direct impact on families, individuals, and businesses,” Collins said. “The intersection of an improving economy, the rise in more dangerous driving behavior, rising numbers of injuries, an increase in vehicle costs due to the severe supply and demand imbalances, and COVID-19 related global shipping challenges are together creating significant upward pressure on auto insurance pricing.”

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CFPB examines renter vulnerability

The Consumer Financial Protection Bureau (CFPB) said the ending of COVID-19 pandemic federal and state relief programs could result in millions of renters suffering previously avoided economic harms.© Shutterstock The CFPB’s report — Financial Conditions for Renters Before and During the COVID-19 Pandemic — detailed the manner in which now expired government relief helped maintain […]

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The Consumer Financial Protection Bureau (CFPB) said the ending of COVID-19 pandemic federal and state relief programs could result in millions of renters suffering previously avoided economic harms.

© Shutterstock

The CFPB’s report — Financial Conditions for Renters Before and During the COVID-19 Pandemic — detailed the manner in which now expired government relief helped maintain renters financial stability.

CFPB Acting Director Dave Uejio said the report confirms renters, when compared to homeowners, are more likely to be Black or Hispanic, more likely to have lower incomes and more likely to be women.

“They are also at particular risk of falling further behind as the nation recovers from the economic impacts of COVID,” Uejio said. “Past recessions and depressions have seen communities of color and low-income communities of all races and ethnicities left behind when the broader economy recovers. We cannot repeat that history. The CFPB is committed to helping renters and their families thrive. We must amplify and protect the modest gains renters made during the pandemic to ensure this nation’s full and equitable recovery from COVID-19.”

The CFPB report showed renters’ debt obligations differed considerably from those of homeowners before the pandemic. Also, it showed that during the pandemic renters’ financial conditions appeared, on average, to improve as much as, or more than, those of homeowners. Also, it revealed that renters’ financial conditions throughout the pandemic have been more responsive to changes in government financial assistance than those of homeowners.

The CFPB indicated in the wake of COVID-19 pandemic federal and state relief ending, renters are in danger of falling further behind the broader national recovery — noting renters represent more than 30 percent of households.

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SEC charges school district with misleading bond investors

The Securities and Exchange Commission (SEC) has charged a San Diego County-based school district and its former chief financial officer with misleading investors who purchased $28 million in municipal bonds.© Shutterstock The SEC’s complaint alleges Sweetwater Union High School District and the school district’s former CFO, Karen Michel, gave investors misleading budget projections indicating the […]

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The Securities and Exchange Commission (SEC) has charged a San Diego County-based school district and its former chief financial officer with misleading investors who purchased $28 million in municipal bonds.

© Shutterstock

The SEC’s complaint alleges Sweetwater Union High School District and the school district’s former CFO, Karen Michel, gave investors misleading budget projections indicating the school district would be able to cover its costs and end the fiscal year with a general fund balance of approximately $19.5 million.

However, the SEC maintains the school district was involved in deficit spending en route to a negative $7.2 million ending fund balance.

Additionally, the SEC indicated the Sweetwater Union High School District, without admitting or denying any findings, agreed to settle with the SEC and consented to the entry of an SEC order finding that it violated two Sections of the Securities Act and would engage an independent consultant to evaluate policies and procedures related to its municipal securities disclosures.

The SEC noted Michel, without admitting or denying the allegations in the agency’s complaint, agreed to settle with the SEC and be enjoined from future violations of the charged provision, as well as from participating in any future municipal securities offerings while agreeing to pay a $28,000 penalty. The settlement is subject to court approval, per authorities.

“As the order finds, Sweetwater and Michel presented stale and misleading financial information as current and accurate,” LeeAnn G. Gaunt, chief of the Division of Enforcement’s Public Finance Abuse Unit, said. “The SEC will continue to address deceptive conduct that prevents municipal bond investors from getting an accurate picture of the financial risks of their investments.”

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Report details Hispanic workers economic contributions

In commemoration of National Hispanic Heritage Month, a recently released Congressional Hispanic Caucus (CHC) and the U.S. Congress Joint Economic Committee (JEC) report details Hispanic workers’ contributions to the nation’s economy.© Shutterstock The effort was spearheaded by Reps. Raul Ruiz (D-CA) and Don Beyer (D-VA), and examines the manner in which Hispanic workers are aiding […]

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In commemoration of National Hispanic Heritage Month, a recently released Congressional Hispanic Caucus (CHC) and the U.S. Congress Joint Economic Committee (JEC) report details Hispanic workers’ contributions to the nation’s economy.

© Shutterstock

The effort was spearheaded by Reps. Raul Ruiz (D-CA) and Don Beyer (D-VA), and examines the manner in which Hispanic workers are aiding the progression of economic recovery and serving as future economic growth catalysts.

Per the report, Hispanic total contribution to the economy is estimated to be over $2 trillion despite being among those most impacted by the COVID-19 pandemic. The report also acknowledges that there are challenges suppressing earnings, negatively impacting working conditions and reducing quality of life.

“Hispanic families have carried the brunt of the COVID-19 pandemic while courageously stepping up, helping the U.S., and risking their lives as essential workers on the frontlines to keep us safe, healthy and fed,” Ruiz said. “The report by the Joint Economic Committee under Chair Don Beyer’s leadership clearly shows America’s Hispanic workforce is driving economic growth today and will continue to do so for years to come.”

Beyer said Hispanic workers, families and businesses are integral to society and the nation’s economy.

“During the darkest days of the pandemic and economic crisis, many Hispanic workers put their own lives and the lives of their families at risk to carry out the essential work and care that was needed to keep the country going,” he said. “And despite suffering disproportionate job losses during the recession, Hispanic workers, who are returning to work in higher numbers than other workers, are helping to fuel the economic recovery.”

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Treasury Department report shows child care system overburdens families

A new report from the U.S. Department of Treasury says the child care market in the United States causes undue burden on American families due to high cost and insufficient supply. © Shutterstock The report bolsters President Joe Biden’s Build Back Better agenda which calls for universal preschool for all 3- and 4-year-old children, expands […]

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A new report from the U.S. Department of Treasury says the child care market in the United States causes undue burden on American families due to high cost and insufficient supply.

© Shutterstock

The report bolsters President Joe Biden’s Build Back Better agenda which calls for universal preschool for all 3- and 4-year-old children, expands tax credits for child care, and provides access to high-quality child care for low- and middle-income families.

“It’s past time that we treat child care as what it is – an element whose contribution to economic growth is as essential as infrastructure or energy,” said U.S. Treasury Secretary Janet Yellen during an event announcing the study. “This is why the Biden Administration has prioritized the Build Back Better proposals, many of which are now moving through Congress. Enacting them is the single most important thing we can do to build a stronger economy over the next several decades.”

According to the report, existing child care in the United States relies on private financing. The report estimated that the average family with at least one child under the age of five would spend approximately 13 percent of the family’s income on childcare. Often, the report said, this expense comes with the family can least afford it and lacks the ability to borrow against future savings to cover the costs.

Additionally, the report said, the current childcare market often fails to provide children with a high-quality early educational experience.

The administration said adopting their child care plan would cut spending in half for most American families allowing them to spend no more than 7 percent of their income on childcare by creating subsidized care, and extending the expanded child and dependent care tax credit. The plan would address revenue shortfalls while allowing families to contribute more to the nation’s economy, the administration said.

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FMI survey shows spike in food e-commerce sales

Survey findings from FMI, the Food Industry Association, determined 95 percent of food retailers with e-commerce options experienced online sales increases in 2020 due to pandemic-related changes in consumer shopping behaviors.© Shutterstock The Food Retailing Industry Speaks 2021 report detailed while consumer demand for groceries increased by half over last year, eight in 10 retailers […]

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Survey findings from FMI, the Food Industry Association, determined 95 percent of food retailers with e-commerce options experienced online sales increases in 2020 due to pandemic-related changes in consumer shopping behaviors.

© Shutterstock

The Food Retailing Industry Speaks 2021 report detailed while consumer demand for groceries increased by half over last year, eight in 10 retailers surveyed noted difficulties attracting and retaining employees is negatively impacting business.

“The pandemic transformed almost every aspect of the food retail industry — from the way consumers shop for groceries and consume their meals to how food is grown, produced and transported to supermarket shelves, to our ability to staff our stores and serve our communities,” Leslie G. Sarasin, president and CEO of FMI, said. “Throughout the past year and a half, the food retail industry has been adapting to meet the shifting needs of the communities they serve. This year’s Speaks report outlines the resilience and transformation of the food retail industry amid the COVID-19 pandemic and examines the proactive strategies and investments retailers have made to adapt to the changing food retail landscape.”

Per the FMI, the findings, garnered from feedback from over 38,000 food retail stores, also revealed ongoing global supply chain issues generated via the pandemic continue to persist for food retailers in 2021 as 42 percent of survey respondents declared supply chain disruptions continue to hurt their businesses.

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SEC files complaint against media companies alleging unregistered stock offering

Securities and Exchange Commission (SEC) filed a complaint against a trio of media companies, alleging illegal unregistered offering of common stock.© Shutterstock The SEC recently levied charges against New York City-based GTV Media Group Inc. and Saraca Media Group Inc., as well as Phoenix, Arizona-based Voice of Guo Media Inc., regarding illegal unregistered offering of […]

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Securities and Exchange Commission (SEC) filed a complaint against a trio of media companies, alleging illegal unregistered offering of common stock.

© Shutterstock

The SEC recently levied charges against New York City-based GTV Media Group Inc. and Saraca Media Group Inc., as well as Phoenix, Arizona-based Voice of Guo Media Inc., regarding illegal unregistered offering of GTV common stock.

The agency also indicated, per authorities, charges were to be issued against GTV and Saraca for conducting an illegal unregistered offering of a digital asset security referred to as either G-Coins or G-Dollars.

According to the SEC, without admitting or denying the SEC’s findings that they violated Section 5 of the Securities Act of 1933, GTV and Saraca reached an agreement on a cease-and-desist order — resulting in paying disgorgement of over $434 million plus prejudgment interest of approximately $16 million on a joint and several basis. Each entity will pay a civil penalty of $15 million, officials noted.

Voice of Guo agreed to a cease-and-desist order resulting in payment of disgorgement of more than $52 million plus prejudgment interest of nearly $2 million while agreeing to pay a civil penalty of $5 million.

“Issuers seeking to access the markets through a public securities offering must provide investors with the disclosures required under the federal securities laws,” Sanjay Wadhwa, deputy Director of the SEC’s Enforcement Division, said. “When they fail to do so, the Commission will seek remedies that make harmed investors whole, such as an unwinding of the offering and a return of the funds to the investors.”

Richard R. Best, director of the SEC’s New York Regional Office, said the remedies ordered by the SEC would provide meaningful relief to investors.

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CFPB examines college credit card agreement decline

A new report from the Consumer Financial Protection Bureau (CFPB) said the market for college credit cards continued its general declining trend in 2020. The 12th annual college credit card report found that agreements with alumni associations made up the largest share of the market in terms of the number of agreements, accounts and amounts […]

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A new report from the Consumer Financial Protection Bureau (CFPB) said the market for college credit cards continued its general declining trend in 2020.

The 12th annual college credit card report found that agreements with alumni associations made up the largest share of the market in terms of the number of agreements, accounts and amounts of payments made by issuers to their counterparties. The report revealed that the total volume of payments by issuers decreased to $20,882,930, from $24,980,457 in 2019 while 10 percent of active 2019 agreements were terminated during the year.

“The CFPB remains steadfast in its efforts to ensure our financial markets work for consumers, responsible providers, and the economy as a whole, especially for students,” CFPB Acting Director Uejio said. “Our duty to collect and publish data on these credit card agreements supports transparency and an informed public.”

The report was issued in accordance with Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) requirements. The CARD Act requires credit card issuers to annually submit to the CFPB the terms and conditions of any college credit card agreement in effect at any time during the preceding calendar year between an issuer and an institution of higher education.

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