RATA
CFPB Orders RPM Mortgage to Pay $19 Million for Steering Consumers Into Costlier Mortgages
RPM CEO Erwin Robert Hirt to Pay Additional $1 Million Civil Penalty
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) filed a complaint in federal district court against RPM Mortgage, Inc. and its CEO, Erwin Robert Hirt, for illegally paying bonuses and higher commissions to loan originators to incentivize them to steer consumers into costlier mortgages. The CFPB also filed a proposed order that, if entered by the court, would require RPM to pay $18 million in redress to consumers and a $1 million civil penalty, and would require Hirt to pay an additional $1 million civil penalty.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| RPM Mortgage, Inc. | Consumer Financial Protection Bureau (CFPB) | Violated the Loan Originator Compensation Rule and the Consumer Financial Protection Act (CFPA) by paying bonuses and higher commissions to loan originators to incentivize them to steer consumers into costlier mortgages | $18 million in redress to consumers; $1 million civil penalty (RPM); Hirt to pay an additional $1 million civil penalty | April 2011 through December 2013 | Loan officer compensation / steering |
Justice Department and CFPB Reach Settlement with Provident Funding Associates to Resolve Allegations of Mortgage Lending Discrimination
Settlement Provides $9 Million in Compensation to African-American and Hispanic Borrowers
The Justice Department and Consumer Financial Protection Bureau (Bureau) filed a consent order today to resolve allegations that Provident Funding Associates (Provident) engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2006 and 2011 from Provident's nationwide network of mortgage brokers.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| Provident Funding Associates | Justice Department; Consumer Financial Protection Bureau | Pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers, in violation of the Fair Housing Act and Equal Credit Opportunity Act (ECOA) | $9 million into a fund for the benefit of victims of the alleged discrimination | 2006 to 2011 | — |
U.S. Justice Department and North Carolina Attorney General Reach Settlement to Resolve Allegations of Auto Lending Discrimination
Settlement Requires Substantial Improvements to Dealerships' Policies and Provides $225,000 in Relief to Affected Customers
The U.S. Department of Justice Civil Rights Division, the U.S. Attorney's Office for the Western District of North Carolina and the North Carolina Department of Justice today announced a settlement of the federal government's first-ever discrimination lawsuit involving "buy here, pay here" auto lending. The settlement, which is subject to court approval, was filed today in the U.S. District Court for the Western District of North Carolina.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| Auto Fare Inc. and Southeastern Auto Corp. | U.S. Department of Justice Civil Rights Division; U.S. Attorney's Office for the Western District of North Carolina; North Carolina Department of Justice | Pattern or practice of "reverse redlining" by intentionally targeting African-American customers for unfair and predatory credit practices in financing used car purchases, in violation of the federal Equal Credit Opportunity Act; also alleged violation of North Carolina's Unfair and Deceptive Trade Practices Act | $225,000 settlement fund to compensate victims of past discriminatory and predatory lending | — | Disproportionately high sales prices, down payments, and interest rates compared to other subprime used-car dealers |
CFPB Issues Proposal To Facilitate Access To Credit In Rural And Underserved Areas
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today proposed several changes to its mortgage rules to facilitate responsible lending by small creditors, particularly in rural and underserved areas. If finalized, the proposal issued today would increase the number of financial institutions able to offer certain types of mortgages in rural and underserved areas, and help small creditors adjust their business practices to comply with the new rules. "Responsible lending by community banks and credit unions did not cause the financial crisis, and our mortgage rules reflect the fact that small institutions play a vital role in many communities," said CFPB Director Richard Cordray. "Today's proposal will help consumers in rural or underserved areas access the mortgage…
Justice Department Reaches Settlement Agreement With First United Bank Over Allegations of Discrimination on the Basis of National Origin
The Justice Department announced today that First United Bank, of Dimmitt, Texas, will maintain uniform pricing policies, conduct employee training and pay $140,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.
| Institution | Regulator(s) | Violation | Penalty | Period covered | HMDA/fair-lending data field involved |
|---|---|---|---|---|---|
| First United Bank | Justice Department (Civil Rights Division); referred by the FDIC | Pattern or practice of discrimination on the basis of national origin — charging higher prices on unsecured consumer loans made to Hispanic borrowers, in violation of the Equal Credit Opportunity Act (ECOA) | $140,000 total, to compensate hundreds of victims of discrimination | — | National origin discrimination in loan pricing (unsecured consumer loans) |
The settlement, which is subject to court approval, was filed in conjunction with the Justice Department's complaint in the U.S. District Court for the Northern District of Texas. The complaint alleges that First United Bank charged higher prices on unsecured consumer loans made to Hispanic borrowers in violation of the Equal Credit Opportunity Act (ECOA).
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