their personal property in the vehicle , such as medical equipment , needed for basic life functions .
• Unauthorized Repossession Fees – Some servicers were found to have failed to stop vehicle repossessions before title loan payments were due as-agreed . They would subsequently withhold the vehicle until consumers paid repossessionrelated fees and refinanced their debt . Similar to the example above , this practice put consumers at risk of prolonged inability to use their means of transportation and the property in their car while they attempted to reclaim their vehicle and pay imposed repossession fees and refinancing costs .
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• Automobile Title Loan Contracts – Lenders engaged in the unfair practice of charging borrowers fees to retrieve personal property from repossessed vehicles and to cover service charges . Servicers withheld the personal property and vehicles until borrowers paid the fees . This practice was found to likely cause harm when the lender , through their repossession agent , withholds personal property and vehicles until consumers paid unexpected personal retrieval fees and agent fees for vehicle redemption . Consumers were also likely impacted by the loss of
• Student Loans – Servicers were found to engage in a practice where they would initially process payments on a loan , but later manually reverse the payment once they realized it was made with a credit card . In this specific example , the servicer had an internal policy prohibiting this payment option . However , the system allowed customer service representatives to erroneously accept credit card payment information over the phone and then process payments . As a result , consumers became delinquent on their account and suffered late fees , negative credit reports and additional accrued interest on previously accepted deposits . •••
Lessons Learned and Key Takeaways
There are several lessons learned from the CFPB ’ s recent supervisory highlight publication . The most important one being fees that can harm members and customers being identified in all facets of institution ’ s operations . Although it may not necessarily be easy to avoid all applicable harms , institutions are encouraged to use the CFPB ’ s most recent publication as a blueprint to assess current fee practices , disclosures , and third-party relationships and agreements . Referencing public enforcement actions issued by the CFPB against Wells Fargo and Regions Bank can help you better understand the severity of regulatory scrutiny around junk fees and improper practices at financial institutions . Doeren Mayhew anticipates additional guidance will be issued on this matter in the near future and will keep you updated as the topic continues to unfold .
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