CFPB Enforcement Actions Spike in 3Q

Maybe there is something to the theory that people are far more productive when working from home than they ever were sitting inside an office. That might be one explanation why, and I say this completely with my tongue in my cheek, the number of public enforcement actions taken during the third quarter of 2020 — when employees from the Consumer Financial Protection Bureau and the rest of the country were working from home — was five times higher than the number announced during the second quarter and more than double the amount announced during the third quarter of last year.

There were 19 public enforcement actions announced during the third quarter of 2020, more than the total that were announced during the preceding three quarters combined. That included a lawsuit that was filed against Encore Capital Group and its subsidiaries (which was settled yesterday), as well as actions involving alleged collection abuses against Nissan Motor Acceptance Corp., PEAKS Trust 2009-1, JPL Recovery Solutions, and debt relief companies My Loan Doctor LLC and Timemark, Inc.

It is unclear what led to the dramatic uptick in enforcement actions during the third quarter. One lawyer, who has represented clients before the CFPB, said the spike is the result of a number of factors.

“I’ve definitely noticed the uptick,” said Allen Denson, a partner at the law firm Hudson Cook, according to the report. “I think that there were a lot of things pent up that are just now reaching their culmination and coming out. Investigations tend to take years, so that’s why you’re now seeing the uptick.”

You would have to go back to the first quarter of 2017 to find a quarter where the CFPB was as active with its public enforcement actions as it was this past quarter. That was back during the heyday of former director Richard Cordray, who was seen as being very active in filing enforcement actions.

There was a time after Cordray left the CFPB in November 2017 where people wondered if the Bureau would ever file another public enforcement action against a company in the financial services industry. That question appears to have been answered.

Quarterly Enforcement Actions Announced by CFPB

  • 3q20 – 19
  • 2q20 – 4
  • 1q20 – 4
  • 4q19 – 5
  • 3q19 – 8
  • 2q19 – 6
  • 1q19 – 8
  • 4q18 – 5
  • 3q18 – 3
  • 2q18 – 3
  • 1q18 – 0
  • 4q17 – 5
  • 3q17 – 9
  • 2q17 – 6
  • 1q17 – 16

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