CFPB Supervisory Highlights Issue 37

CONSUMER FINANCIA L PROTE CTION BU REAU | DECEMBE R 2024 S upervis ory Highlights Issue 37 (Wi nter 2024)

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 1 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) Table of c ontent s Table of contents......................................................................................................... 1 1. Introduction........................................................................................................... 2 2. Supervi sory Observ ation s................................................................................... 4 2.1 Deposits.................................................................................................... 4 2.2 Furnishin g.............................................................................................. 10 2.3 Short - term small d ollar lend ing............................................................. 13 3. Supervi sory Develo pments............................................................................... 18 4. Enforceme nt Actions.......................................................................................... 20 4.1 Public Enf orcement A ction s................................................................... 20

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 2 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) 1. Introd ucti on The Co nsumer Financ ial Protection B ureau ’s (CFPB) Super vision pro gram asse ss es sup ervised institu tions ’ compliance with Federal co nsumer financi al law including unfa ir, deceptive, or abusive ac ts o r practic es (UDAAPs) prohibit ed by th e Consumer Fi nancial Protecti on Act of 201 0 (the CF PA). 1 This edition of Superv isory High lights covers recent super visory fi ndings i n the areas of deposit s, furnishing, and short - term sm all dollar lending. In connect ion with depo sits, Supervi sion contin ues to fi nd that supe rvised ins tituti ons are cha rging con sumers unfair overdr aft and non - sufficient funds fees, and t his edition pr ovides an updat e on Supervision’ s work in thi s space. Asi de from th e refunds di scussed in the contex t of depo sits accoun ts below, mortgag e originat ors and se rvicers ha ve also recently reported issuing refunds related to unfa ir, deceptive, or otherwis e unlawful fe es and ch ar ges, w hich the CFPB antici pates re port ing on in an upcoming edit ion of Superv isory High lights. In short, m ortgage s ervicers have report ed issuing $4, 251,815 in r efu nds for 91, 931 affect ed loans. M ortgage originato rs report ed issuing $115, 605,024 in refu nds for 134,912 affe cted loans. In connec tion with furnishing, e xaminers continue to fi nd violatio ns of the Fair Credit Reporting Act (FCRA) 2 and its i mplement ing regulat ion, Regulati on V. 3 These violatio ns include failin g to maintain p olicies and procedures regarding identify t heft and the accurac y and integri ty of information. Addition ally, exa miners con tinue to find that fu rnisher s are not inv estigatin g indirect disputes. This edit ion of Supervis ory Highlights also includes, f or the first time, supe rviso ry findin gs in connect ion with Bu y Now, Pay Late r and paychec k advance products. Mor e sp ecifically e xaminer s identified mult ip le violation s of law including UDAAPs in connecti on with both Buy Now Pay L ater and paych eck advance product s. This edi tion also h ighlights how weak technolo gy controls ca n caus e or contribut e to viola tions of f ederal co nsumer financi al law. Fo r example, Supervis ion found that the way th at co re process ors configu red th eir platform s caused violations of f ederal co nsumer financ ial law. Additi onally, an ins titutio n violate d the law b y rolling out a dysfunc tional online b anking 1 12 U.S.C. §§ 5531, 5536. 2 15 U.S.C. § 1681 et seq. 3 12 C.F.R. Par t 1022.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 3 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) platform that mad e it difficul t for cr edit union m embers to perform ba sic ban king function s for weeks, with some fe atures unavai lable fo r more than six mo nths. One are a of partic ular conce rn assoc iate d with technology that the CFP B expec ts to highl ight in future publicati ons is the ri sk associat ed with “B ring You r Own Devi ce” (BYOD) policies, which refers to being able to conduct business o n a personally o wned dev ice, rather th an a company issued de vice. BYOD pol icies may in crease secu rity risks inclu ding, for ex ample, data br eaches, malware, and unautho rized access to sensi tive data. Ins titut ions that pe rmit BY OD should ensure that they tak e steps t o mitigat e the risks a ssociated w ith thes e poli cies. The findings in this edition of Supervisor y Highli ghts cov er select ex aminations t hat were general ly complet ed betwee n January 1, 2024, to Oc tober 1, 20 24. To mainta in the an onymity of the supe rvised ins titution s discuss ed in Supervisory H ighlights, refere nces to i nstitutions ge nerally are in the plural and the related findings may p ertain to one or more in stitution s. 4 We invit e readers with quest ions or com ments abo ut Supervis ory Highligh ts to con tact us a t CFPBSupervision@cfpb.gov. 4 If a supervi sory matter i s referr ed to the Office of Enfor cement, Enf orcement may c ite addi tional violat ions base d on these facts or uncover add itional information that cou ld impact the conclusion as to what violations may exist. <a href="mailto:CFPBSupervision@cfpb.gov">

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 4 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) 2. Supervi sory O bservati ons 2.1 Deposits Supervi sion exa mined the d eposit opera tions of s upervis ed instituti ons to asse ss whether t hey engaged in any UDAA Ps prohibited b y the CFPA. 5 In these examinat ions, Supervis ion identi fied unfair ov erdraft and non - sufficient funds (NSF) fees a s well as un fair acts or practic es related t o cons umer reques ts to sto p paymen t of preauthori zed debit card transa ctions. 2.1.1 Unantici pated o verdraft fees an d re - prese ntme nt NSF fees In rece nt examinat ions of depository insti tutions a nd service provid ers, Supervi sion continu ed to cite un fair acts o r practic es at insti tutions t hat charg ed consum ers for unfa ir unantici pated overdra ft fees, suc h as Authori ze - Posi tive Settle - Negative (APSN) overdra ft fees, du ring t his time period. 6 Superv ision also c ontinued to c ite insti tutions in connect ion with charg ing consume rs NSF fees on the transact ion that already incurred an NSF fee when it was previously declined. 7 5 12 U.S.C. §§ 5531, 5536. 6 APSN over draft fees ar e over dra ft fees th at financ ial i nstit utions as sess f or debi t card or AT M tr ansacti ons for wh ich the consumer had a suffici ent a vailable balanc e at th e time th e consumer a uthorized th e transacti on, but whi ch, given the delay bet ween auth orizatio n and settlement, the con sumer’s a ccount balanc e is insu fficient to co ver at th e time of settlement. Se e Supervi sory Hi ghlights: Junk Fees Updat e Specia l Edition, Is sue 31, 4 – 7 (March 2023) availabl e at: https://www.co nsumerfina nce.gov/da ta - researc h/researc h - reports/s upervisory - hig hlights - junk - fees - update - special -editio n- issue - 31 - fall -2 023; Supervisory Highlights: Junk Fees Special Edi tion, I ssue 29, 3 – 6 (Mar ch 2023) availabl e at http s://www.c onsumerfi nance.gov /data - research/r esearch - reports/su pervisory - hig hlights - junk - fees - special -editio n- issue - 29 - wint er - 2023/; Co nsumer F ina ncial Prot ection Ci rcula r 202 2 - 06, Unanticipated Overdraft Fee Assessment P ractices, at 8 – 12 (O ct. 26, 2022) a vailable a t: https://www.consumer finance.gov/c ompliance/circ ulars/consumer - fi nancia l - protection - circula r - 2022 -06- unanticipated - overdr aft - fee - as sessmen t - practices/ 7 These tra nsacti ons, c alled r e - pr esentments, oc cur when, a fter declini ng a transact ion beca use of in sufficient f unds and asse ssing a n NSF fe e for t he t ransact ion, the c onsum er’s account - h olding instituti on returns the transactio n to the merchant’s de pository institution, an d the merchant presents the s ame transaction to the consumer’s account - holding in stitution for pay ment a gain. In some i nstanc es, wh en the con sumer’s ac count r emains i nsuffici ent to pa y for th e tran saction upon r e - pr esentment, th e consum er’ s acc ount - holding institution again returns the trans action to the merch ant and assesses anoth er NSF fee for t he transact ion, with out providi ng consumer s a reasonab le opportunity to prevent another fee after the f irst failed presentment attempt. A bsent res tric tions on t he ass essment of NSF fees b y the c onsum er’s ac count - h olding institution, thi s cycle can occur multiple times, and consumers may be charged mu ltiple fees for a sin gle transactio n.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 5 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) Since t he CFPB heigh tened its s upervisory attention o n overdraft and NSF fees in 2022, financial i nstit utions have agreed to refund near ly $250 millio n to consumers — approximate ly $184 milli on in unfai r unantici pated overd raft fees c harged o n transactio ns t hat were autho rized when the consu mer had sufficien t funds, and app roximately $66 milli on in unfair NSF fee s charged on the same t ransacti on that alre ady incurre d an NSF fee when it was p revious ly decli ned. This $250 million ref lects $240 milli on that the CFP B previous ly announced in October 2023 and Apr il 2024, and an add itional $1 0 millio n that financ ial instit utions have agre ed to r efund s ince t he peri od co vered b y thos e ann ouncem ents. 2.1.2 Core proces sor practices Supervi sion contin ued to ex amine cor e processor s in their ca pacity a s service providers t o lar ge deposit ory institu tions. C ore proce ssors pro vide critical deposit, pa yment, and data pr ocessing service s to many supervised in stituti ons, and th e system fun ctiona lity that th ese entiti es develop drives ma ny fee practi ces, includin g overdraft an d NSF fee pr a ctices. In exam inations of c ore proc essors, examiners f ound tha t core proc essors had enhanc ed their core pla tforms durin g th e review peri ods to ena ble client i nstitution s to avoid a ssessing re - pres entmen t NSF f ees an d APS N over draft f ees. Howev er, ex amin ers als o f ound that the c ore process ors configu red th eir platform s so that th e platform s would c ontinue t o assess th e fees by default unless the cl ient in stitutions to ok affirm ative acti on to avoid a ssessi ng these fee s. Exami ners conclu ded tha t, in the offe ring and providing o f core servi ce pla tforms, core process ors engage d in an un fair act or p ractice by assessing APSN ov erdraft fe es and re - presentm ent NSF f ees throu gh their co re platfor ms. An act or practice i s unfair w hen: (1) it causes o r is likely to cause su bstantia l injury to c onsume rs; (2) the in jury is n ot reasona bly avoida ble by consu mers; a nd (3) the inju ry is not outweigh ed by count ervail ing benefi ts to consume rs or to com petition. 8 The ass essment of re - present ment NSF fees and A PSN fees re sults in sub stantia l injury to consume rs. Thes e fees also inc reased th e risk of c onsumers i ncurrin g additiona l fees on subsequ ent transa ctions ca used by th e fees, whic h lowered c onsumers’ account ba lances. T he core proces sors c ause d these i njuri es b ecause t hey were a p redic table a nd for eseea ble conse quence of th eir cor e platforms’ l imitati ons and configurat ion. Wher e the platf orms were configu red to ass ess the fee s by default, it was fo reseeable to the core processo rs that their client s would fail to take a ffirmative a ction to cea se chargin g these f ees and thu s continu e to 8 12 U.S.C. §§ 5531 and 5 536.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 6 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) assess t hese fees. A s with th e fees themsel ves, the relevant sy stem limita tions a nd configura tions were not reasonably avoidable by consumers and not outwei ghed by any co untervaili ng benefit s to consu mers or com petition. In resp onse to thes e findi ngs, the cor e processo rs enhanc ed their co re platf orms to not only enable their clien t institu tions to pr event the a ssessment of these fee s but also t o ensure tha t client s would not a ssess the se fees by d efault if th e clients did not take a ction to prevent t heir assessm ent. 2.1.3 Improper re - pr esentme nt proce ssi ng practic es S upervi sion has r eviewed de pository in stitution s’ practic es in proc essing autom ated clearing house (AC H) transa ctions to en sur e that t hey ar e takin g ade quate s teps t o prev ent the origination of improper re - pr esentmen t transac tions by t heir merc hant and business cli ents. When a con sumer pays for goo ds or servic es, the con sumer ma y authoriz e the m erchant to d ebit their bank ac count b y submitting an ACH trans action to th e consumer ’s bank. The mer chant will or iginate the ACH transact ion by p assing an AC H debit ent ry along to its bank, referred to as an “or iginating depositor y financial i nstitutio n” (ODFI), whi ch will then s end th e entry to the consume r’s bank, referred to as a “rece iving depo sitory fin ancial i nstitution ” (RDFI). T he RDFI then ma y either po st the transa ction and d ebit the con sumer’s bank acco unt or re turn the transaction t o the ODFI becaus e of insufficient fu nds in the consu mer’s ac count. The net work rules g overn ing ACH tra nsactions i mpose ce rtain forma tting a nd processi ng require ments to id entify re - p resentm ent transa ctions. As ex plained a bove, in response to supervis ory findi ngs, cor e process ors have en hanced th eir platf orms to ena ble institu tions to avoid chargin g NSF fees on readil y identifiable re - presentm ent transa ctions. Ac cordingly, wh en an ODFI does not ensu re that its clients comply with the se formatti ng and proces sing require ments or o therwise d o not origin ate im proper re - p resentmen t transa ctions, AC H transac tions may not be readi ly identifiab le as re - pres entm ents by the RD FI and, by ex tension, the RDFI ’s core pla tform ma y fail to pre vent char ging NSF f ees on re - pre sentmen t transacti ons. The ACH n etwork rul es also g enerall y limit the nu mber of p ermissibl e re - present ments f or a single transactio n by limiting an O DFI and it s clients t o a maximum o f two re - presentm ent attempt s after th e initial presentmen t is return ed for insuf ficient fu nds. However, as th e CFPB has previ ously obs erved, a n ODFI’s clien ts may, in an attemp t to obtain payment f rom

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 7 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) consume rs, seek t o improperl y re - pres ent transa ctions to c ircumv ent this lim it on the num ber of permi ssible repres entments. 9 Supervi sion found that deposito ry insti tutions engaged in an unfair ac t or pract ice in the ir capacity a s ODFIs by processin g transa ctions for payment a s initial p resentment s when th e transacti ons were in fact re - pr e sentments without taking steps t o address indi cia of i naccuracy. Exami ners found that th ese institut ions, in their c apacity as ODFIs, di d not monitor t heir origina tor clien ts’ use of th eir ACH pr ocessing s ervices to i dentify or preven t them from improperly r e - presenti ng trans actions. These depo si tor y instit utions possessed in formati on that strongl y suggest ed that a pe rcentage of ACH tran sactions that they pr ocessed as ODFIs wer e re - present ed items t hat were im properly f ormatted a nd submi tted by th eir origin ator clien ts as new trans actions. These indici a inclu ded ACH en tries refl ecting tra nsactio ns from the sam e payee, in the same amount, made close in t ime, which lac ked indic ations that th e transact ions were re curring pa yments or otherwis e reflecte d separat e transac tions. By fail ing to monito r origin ators to iden tify and p revent im proper r e - presentm ent practices, thes e deposito ry insti tutions ca used or we re likely to cause su bstantial injury to c onsumers in the form of NSF fees that could otherwi se have been avoided. T hese fe es wou ld not have been assess ed had the transact ion been properl y re - prese nted because the transact ion wou ld then eith er be i dentif iabl e as a r e - present ment and th e NSF fee wo uld have be en waived by the bank’ s core platfo rm or would have not been s ubmitt ed at a ll to the extent that the business cl ient had alread y submitted the maximum numbe r of re - presen tmen t attem pts. Although the supe rvise d deposit ory institu tions, a s ODFIs, did not act ually asse ss these N SF fees, ex aminers foun d they caus ed the in jury becau se the a ssess ment of thes e fee s was a proba ble and fores eeabl e conse quence of th eir proces sing tran sactions f or payment a s initial presentm ents when the transacti ons were in fact re - p resen tment s. Even if a c onsumer’ s bank did not asse ss NSF fees, consum ers still suf fered in jury in the f orm of improper d ebiting of funds. Wh en an ori ginator obta ins paym ent for a pr eviously returned transacti on by su bmittin g the transa ction as in itial pre sentment, ra ther tha n a re - prese ntme nt, withou t the consum er’s auth orization, the cons umer suff ers monetary harm by their acc ount bein g deb ite d without their auth orization. These injuries we re not reasonab ly avo idable and were al so not outw eighed by co untervaili ng bene fits to c onsumers o r competition. 9 CFPB, Onl ine Payday Loan Payme nts (2016), at 14 (explaining that, acc ording to CF PB analysis of online A CH payments, 50 percent of fa iled p ayments are r e - presente d after t hree failed pa yment attem pts) ava ilable at: https://www.consumerfi nance.gov/dat a - resear ch/resear ch - rep orts/on line - payday - loan - payments/.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 8 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) In resp onse to thes e findi ngs, deposi tory insti tutions im plement ed proces ses to preven t the origination of improper re - pr esentmen t transac tions by t heir clien ts, includ ing regula rl y monitor ing and audi ting ACH tr ansactions to identify any re - presente d items t hat are mis coded as initi al prese ntments and any o ther indicia of inac curac y. 2.1.4 Stop payme nt s ervices of debit card net work op erators Consu mers frequent ly complain th at they face challenges in stopping payment of p reauthorized debit card t ransaction s, which they ha ve a right t o do under the E lectro nic F und Tra nsfer Act (EFTA) and its i mplementing Re gulation E. 10 Superv ision has fou nd in examinati ons that deposit ory institu tions li kewise fac e difficu lties in ex ecuting sto p payment requests f or recur ring debit ca rd transac tions for va rious rea sons. Unlike o ther types of recurring paymen t transacti ons, depo sitory ins titution s’ core platf orms general ly do not of fer the ca pability to stop payme nt of preau thorized d ebit card t ransacti ons. Regula tion E reco gnizes tha t, in the cas e of a prea uthorize d debit made through a d ebit card networ k, a deposit ory institution may not h ave the capab ility to block a preautho rized deb it from b eing posted t o the consu mer's acco unt give n the manner in which preauthori zed debi t card trans actions are processed. 11 Accordingly, it allows banks to comply with the stop - payment require ments by u sing a thi rd party, such as a deb it card netwo rk, to block the transfer, a s long as the c onsumer's a ccount is n ot debited f or the p ayment. 12 To that en d, some d ebit card network s offer st op paymen t capabili ties that n etwork m embers may u se to sto p payment of recurri ng debit ca rd transa ctions rout ed throug h the netw ork. Supervi sion recently conducte d examinations of debit c ard network ope rators in their capacity as service pr oviders to lar g e dep ository in stitutio ns. Exam iners foun d that, in some debit ca rd network s, thes e network opera tors did n ot offer a network - based sto p payment s ervice that t heir memb ers may use to s top paym ent of a recur ring debit ca rd tran saction. E xamin ers also foun d th at, in other debi t card n etworks, the n etwork o perators did offer s uch a servi ce but very fe w of its m ember s elec ted to u se th e servi ce. Examiner s concluded that these network oper ators engaged in an unfair act or pr actice by process ing preautho rized debit ca rd payments su bject to consume r's valid stop paym ent reques ts due to th e manner in w hich they operated t heir netw orks. By p rocessing s uch transacti ons, th e network operators ca used su bstantial monetary in jury to con sumers who wer e 10 15 U.S.C. § 1693e(a); 12 C.F.R. 1005.10(c). 11 See Comment 1005.10(c) - 3. 12 S ee Id.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 9 SUPER VISORY HIG HLIGH TS, ISSUE 37 (WINTER 2024) charge d for preau thorize d debit card transac tions that th ey request ed to be a nd were entitl ed to have st opped. Ev en though t he consum er’s financia l institution could likely reco ver the amount debited th rough standa rd dispute res olution and chargeback processes fo r debit card transacti ons, con sumers would still be depri ved of their fun ds whil e the disput e was proc essed. In any ev ent, these processes are not an ad equate substi tute for a con sumer’ s right to st op payme nt of p reauthor ized deb it car d tr ansactions. Operato rs of netw orks tha t did not offe r a stop pay ment servic e caused t his injury because it was forese eable to th em that not of fering s uch a capab ility in the n etwork w ould result i n network memb ers lacking the capa bility to st op payment o f the transa cti ons and, by exte nsion, consume rs being c harged for such tran sactions a fter they su bmit a val id stop payment or der. Even wh ere network operato rs offer ed a network - based stop pay ment ca pabi lity, t hese operato rs still ca used thi s injury to c onsumers, becaus e, given tha t very few n etwork me mbers elected t o use the ca pabili ty, it was fo reseeabl e to them tha t consum ers would be charged f or preaut horized debit s that they are entitl ed to have stopped. The sub stantial inju ry ident ified i n these exams was no t reaso nably avo idable by co nsumers. When e ntering a rec urring trans action, consumers have little re ason to antic ipate pote ntial injury, and if the y did, few m eans to avo id it. Cons umers have a reaso nable expect ation that their issuin g bank will comply with the requirem ents of Regulati on E and stop paym ent if a valid reques t is enter ed. Consumer s also hav e little to n o control ov er whic h debit card n etworks t heir transacti ons are r outed throu gh, and no control o ver whether the netw ork offers a stop pay ment service or whethe r their ban k has volun tarily en rolled in s uch a servi ce. Lastl y, in consid ering counte rvailing benefits t o consumer s and comp etition from processi ng prea uthorized debit car d transacti o ns sub ject to a consumer’s valid sto p payment r equest, Superv is i on found this pra ctice to be inj urious in i ts net eff ects. In resp onse to thes e findi ngs, the net work opera tors revis ed and im plemen ted relevan t network process es and capa bilitie s to ensure that they c ease to proc ess preaut horize d debit card payment s routed th rough t heir netw orks that ar e subject t o consumer s’ valid st op paymen t reques ts.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 10 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 2.2 Furnis hing E ntiti es -- such as bank s, loan servicers, a nd othe rs (to whic h we refer herein col lectively as furnishers) -- that furnish inform ation to consumer re porting compa nies (CRCs) 13 for inclusion in consu mer repor ts play a vit al role in availabil ity of cre dit and have a significant role to play i n the fai r and accur ate reporting of credit i nformation. Furnishers a re subjec t to severa l require ments under th e FCRA 14 and its i mplementing regulatio n, Regulati on V, 15 including ob l ig at io ns to reason ably in vestigate di sputes an d to furnis h data subj ect to th e relevan t accuracy requi rements. I n recen t revi ews, ex amin ers con tinued to find defi ciencies in furnisher s’ com plianc e with FC RA and Regu lation V requir ement s. 2.2.1 Duty to mai ntai n reason able pr ocedures t o res pond to identify t heft blo ck requ ests n otific ations from CRCs The FCR A require s furnisher s to have r easonable procedure s in place t o respond t o certain notification s they receive from CRCs related to inf ormation resultin g from identity t heft (i.e., identity theft bl ock request not ifications) to pre vent the refurn ishi ng of s uch informat ion. 16 Exami ners found that furn ishers did n ot have rea sonabl e procedur es in pla ce to respond to identity theft bl ock request not ifications from CR Cs. Specifically, in recent reviews of instal lment loan fu rnish ers, exami ners identi fied tha t the furni shers did n ot have any procedu res in plac e to resp ond to iden tity theft block re quest notifi cations received fr om CRCs. Conseq uently, th e furnishe rs did not p rocess th e requests an d repeat edly refurn ished informa tion that c onsum ers asserte d had resul ted from i dentity t h eft and, thus, that shoul d have bee n blocked. In respo nse to these f indings, fur nishers are establi shing and imp lementing procedu res to res pond to identi ty theft bl ock re quest notif ications r eceived from CRCs. 2.2.2 Duty to con duct reasona ble inv estigations of in direct disputes After receiving notice of a disp ute of the completenes s or accur acy of any infor mation fro m a CRC, furn ishers a re require d to conduct a reasona ble inve stigation wi th res pect to the di sputed 13 The term “con sumer report ing compa ny” means t he same a s “consumer r eporting ag ency,” as defined in th e Fair Credit Rep orting Act, 15 U.S.C. § 1681a(f), inc luding na tionwi de consumer r eporting ag encies as de fined in 15 U.S.C § 1681a(p) a nd natio nwide sp ecia lty consumer rep orting age ncies as de fined in 15 U.S.C. § 1681a(x). 14 15 U.S.C. § 1681 et seq. 15 12 C.F.R. Par t 1022. 16 15 U.S.C. § 168 1s - 2(a)(6)(A).

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 11 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) information. 17 The furni sher must review al l relevan t informati on provi ded by the C RC and must com plete the in vestiga tion and r eport th e results to t he CRC wit hin a certain requisi te timeframe (t ypically 30 days). 18 Condu cting a reas onable in vestigation that is re sponsiv e to the specifi c allegati ons in a di spute often r equires f urnisher s to at least review in formation r elevant to the d ispute i n its own pos session and, in some cas es, may neces sarily ent ail acces sing o r req uest ing third - party d ocument s and other in formati on relevan t to the d ispute to whi ch the furnishe r reasonab ly has acces s. Exami ners are conti nuing to fin d that furn ishers are viola ting the FC RA duty to con duct reasonab le inves tigations of indirect disp utes. 19 In recen t reviews of debt co llector furn ishers, examiner s found th at the furnish ers fai led to conduct reasonable i nvestigatio ns of cer tain indirect dis putes in circumstan ces in which th e furnishers utiliz ed automated disput e response systems that re viewed only their o wn systems of record to assess th e accura cy of the dis puted information. Ex aminers i dentified instances in which the furnis hers, through t heir automated systems, respond ed to CRCs verifying t he inform ation subj ect to the di spute ev en though th e furnishe rs’ recor ds were insuf ficient t o confirm the informat ion in a re liable manne r. In each instan ce, the furn ishers’ automated systems did n ot consid er any rec ords o f the furnis hers’ cli ents — i.e., the enti ties, such as cred itors, on beha lf of which t he furnis hers were coll ecting debt s — rele vant to the dispute. In additi on, examin ers foun d that debt collector f urnishe rs failed t o reasona bly investiga te certain indirect di sputes in circumsta nces in whi ch the f urnisher s’ agents r esponded to C RCs regardin g the disp ute withou t investiga ting an y relevant in formati on o n their client s’ systems of record d espite th e agents ha ving acce ss to those systems of record. Ra ther t han reviewin g their client s’ records t o which th ey had acce ss to asses s the accu racy of the di sputed in formati on, the furnis hers’ agen ts forwar ded the di sputes to t he clients fo r investiga tion an d, when the cl ients fail ed to r espon d, inst ruc ted CRC s to del ete t he rela ted con sume r tradel ines. Exa miner s found that th e furnishe rs in these ci rcumstan ces failed to conduc t reasona ble investig ations of indirect disp ute s. 17 15 U.S.C. § 1681s - 2(b)(1)(A). 18 15 U.S.C. § 168 1s - 2(b)(1)(B), (C). 19 See for exam ple, Superv isory Highlight s Consumer Repor ting Specia l Edit ion, available at: cfpbsupervisory - highli ghtsissu e - 20122 019.p df <a href="https://files.consumerfinance.gov/f/documents/cfpbsupervisory-highlightsissue-20122019.pdf">

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 12 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 2.2.3 Duty to est ablis h and impl emen t reasona ble pol ici es and proc edures concerni ng the accuracy and in tegrity of furnishe d info rmatio n Examiner s are cont inuing to find 20 that furn ishers are v iolating the Regulation V d uty to est ablish and imple ment reaso nable writ ten policie s and proce dures reg arding the accur acy and integrity of the inf ormati on furnish ed to a CRC a nd to consi der and inc orporat e, as appro priate, the guidelin es of Appendix E to Regulatio n V. 21 Recent su pervisory r eviews i dentifyin g violations of this Regulation V requirement includ e:  In revie ws of student loa n furnishers, exam iners found that t he furni shers reli ed solely on extern al proce dures rega rding the technica l steps for c reating a nd transm itting consume r reportin g files, but m aintain ed no inte rnal poli cies or pro cedures wit h respect to complyin g with the applicabl e requirements of the FCRA and Re gulati on V. Exami ners found that the furni shers’ fai lure to es tablish an d implem ent reasona ble writte n policies and procedures regarding the accurac y and integ rity of i nformatio n furnishe d t o CRCs contr ibuted to multipl e system ic accuracy issues id entified a t the furnishe rs, inclu ding, for exam ple, cont inuing to report acco unts th at had been dischar ged in bankr uptcy, report ing inaccurat e term d urations f or certain lo ans, and report ing inac curate sp ecial comm ent code s regarding the statu s of certai n accounts. • In reviews of in stallmen t loan furn ishers, examiner s found t hat furnish ers lack ed reasona ble polici es and p rocedures f or identify ing prac tices or ac tivities t hat can compromise the accuracy or int egrity of furnishe d information. Spe cifically, examin ers fou nd weaknesse s in furnishe rs’ poli cies and proce dures with respect to conside ring feed back r eceiv ed fro m CRCs — resulting in t he furnishers failin g to identify that furnishing fil es were rejected by C RCs — and pro cessing iden tity thef t block re quests receive d from CRCs. Defici encies in th e furnis hers’ intern al control s regard ing the accuracy and int egrity of furnis hed information l ed to failures in id entifying, and promptl y remediat ing, account s that wer e furnish ed inaccur ately. Examiner s also fou nd that furn ishers fa iled to des ign mean s of commu nication w ith CRCs t o prevent erroneou s association of information with the wrong consu mers, which result ed in the furnishing of mismatche d personal i nform ation for thou sands of co nsumers. 20 Id. 21 12 C.F.R. § 10 22.42(a), (b).

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 13 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024)  In reviews of c redit card furnis hers, examiner s found that the fu rnishers f ailed to maintain and impleme nt reasonable w ritten fu rnishing polici es and proce dures, includ ing by failing to ade quately pro vide for, among other th ings: the ident ificat ion and handlin g of frivol ous or irr elevant dis putes, t he rep laceme nt of dis pute cod es foll owing resolut ion of dispu tes, an d quality as surance wi th respec t to the acc uracy an d integrity of information f urnished to CRCs. Examiners also i dentified defici encies in furnishe rs’ policie s and proc edures for c orrecting in formati on after d etermini ng it to be ina ccurate, finding that, f or example, suc h deficien cies a llowed i naccuracie s to persis t for ov er a year on av erag e befor e being rem ediat ed. In respo nse to the se findings, furnishers are implement ing and/or enhancing wr itten po licies and proc edures to addr ess the identifi ed procedu ral deficienci es. 2.3 Sho rt - t erm small dollar lending The sh ort - term small do llar lendi ng market continu es to evol ve, and as pa rt of this m arket, th e Buy Now, Pay Later marke t, where lende rs adve rtise buying pr oducts over four paym ents, has expan ded ra pidly over t he pas t few y ears. T he paych eck advance m a rket, whe re lender s t ie funding amounts to accrued or estimated w ages and tho se amounts are repayable on the next payday or withheld fro m the next paych eck, also has e xpanded r apidly in rece nt years. Firms someti mes mark et these pr oducts as “ea rned wag e” produ cts. C ertain Buy Now, Pay L ater firms and cert ain paychec k advance f irms consente d to CFPB’s examinatio n authorit y. Across the se examination s, examiners identified a number of unfair, dece pt ive, or a busive ac ts or pract ices. In additi on to the examinati ons giving r ise to the findings d iscussed in this sec tion, CFPB sta ff worked with certa in state regulators on their exa minati ons of Buy N ow Pay Lat er firms. 2.3.1 Failing t o timel y resolve c onsu mer disput es Consum ers who us ed Buy Now, P ay Later loa ns to pu rchase pro ducts or s ervices fre quently alleged that the m erchants did n ot provi de the ite ms or serv ices as ag reed or comm unicated oth er d isput es to the lend er. L enders e ngaged in unfai r act s or pra ctice s by failing to ti mely resolv e consume r disputes in which c onsumers al leged t hey were ow ed refunds f or various reasons, such as w he re th e de lay was contr ary to the dispu te policy on its we bsite regardin g dis pute res oluti on tim elin es. Th ese del ays w ere lo ng, wit h hundr eds of cons umers depriv ed of funds f or months at a time. Con sumers inc urred sub stantial in jury in th e form of d eprivation of funds that should have been re funded in a t imely manne r. Additiona lly, con sumers whos e

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 14 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) cla ims wer e denie d may have be en requ ired t o ma ke full paymen ts at un pred icta ble tim es afte r delayed investigat ions duri ng which the y were not permi tted to make payments. The injur ies were n ot reasonabl y avoi dable as cons umers lack ed cont rol over th e disput e resolution process. The subs tantial i njuries t o consum ers were not outweighe d by any co untervai ling benef its to consume rs or competit ion. In re sponse to th ese findin gs, t he Buy Now, P ay Later le nder s refunded the amou nts at issue and implemente d monitor ing to elimi nate del ayed reso lutions. 2.3.2 Misrepres enting loan costs or te rms Buy Now, P ay Late r lenders wo rked with m erchan t partners to a dvertis e th eir loans, and in certain instances, the mercha nt partn er websit es adverti sed incorr ect loan costs or t erms. The lenders exercise d control a nd approval rights ov er these adv ertisem ents. Thus, the lende rs engaged in a decept ive act or practice whe n its merch an t partn ers ran adv ertisem ents on their behalf t hat includ ed false re presentati ons. Th ese adverti sements mi sled or we re likely to mislead reas onabl e cons umers, and the dec eptiv e repr esentati ons were ma terial b ecause they r elated to the cost a nd terms of the loan s as payment m ethods. In response to these findings, t he lend ers contac ted the rel evant mercha nts to ensu re they u pdated th e ir website s and ref unded overcha rges to cu stomers. T hey also en hanced th e marketing review process acr oss merc hant partn ers. 2.3.3 Denying cre dit based on paym ent processi ng deficienci es on earlie r loans Buy Now, Pay Later le nders’ p ayment platfor ms prevented consumers w ith loan balanc es be low $1 from making payme nts. Subsequent ly, the lenders de nied those cons umers’ loan app lications on the basis that consumers had not paid thos e balances. The lenders engaged in an unfair act or practi ce by preve nting consum ers with lo an balance s below $1 from making p ayments, while denying those co nsumers’ loan ap plicat ions beca use of those s ame b ala nces. This cond uct caused o r was lik ely to cause su bstantial injury, a s i t resu lted in the l ender s denying additional credit f or consum ers with ou tstanding ba lances o f less than $1. In addi tion, consu mers may have incu rred cos ts attemptin g to secur e alterna tive credi t. Consum ers als o may have s pent time contact ing the le nder s to resolv e these ou tstandin g balances. T his prac tice was n ot reasonabl y avoid able, as the lender s did not allow cons umers to make payments to cure an outs tanding balance of less than $ 1. The substanti al injury to consumers was not outweig hed by any co unter v ailing benefit s to consumers or co mpetition. In res ponse to thes e findings, Supe r vis ion directed the len der s to enhan ce system ca pabiliti es to allow c onsume rs to pay off or autom atically re move loan balance s of less th an $1 and re frain fro m preventing c onsumers fro m obtaining additio nal loans if t hey have b alances of less than $1.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 15 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 2.3.4 Designin g cons umer inte rfaces to incl ude misrepres entati ons about uses and bene fits of t ips and tipping Exami ners found that lend ers design ed consum er interfa ces for paycheck adv ance p roducts – someti mes mark eted as “earne d wage” pr oducts – to include s tatements a nd ill ustrations repres enting that if consu mers paid ti ps, the tip s would hel p specific n umbers of cu stomers a nd were a way to help ot her borr owers. In fa ct, lende rs added tip s to general revenu es. A repre sentation, omission, act, or prac tice is de ceptive w hen: (1) the repres entation, o mission, act or pra ctice mi sleads or is l ikely to misl ead th e consumer; (2) the con sumer’ s interpr etation of the represen tation, om ission, act or practi ce is reasonabl e under th e circumstan ces; an d (3) the mi sleading r epresenta tion, omi ssion, ac t or practic e is materia l. 22 Examiners foun d lend ers en gaged i n dec eptiv e acts a nd pra ctic es when they misled or wer e lik ely to mi slead reasona ble consum ers th rough writt en and gra phic referen ces tha t correlat ed amounts of tips prov ided t o number s of pe ople helped. They a lso mis led or were like ly t o misle ad reasonab le consume rs into bel ieving tips direc tly benefi ted other cu stomers, althoug h in real ity they added tips to gen eral r evenu e. Thes e repr esent ation s wer e materi al be cause t hey w ere lik ely to a ffect customer s’ choices rega rding ti pping, inclu ding whether to tip and how m uch. An abusi ve act or pra ctice: (1) material ly interf eres wit h the ability o f a consum er to und erstand a ter m or condition o f a consu mer financial p roduct or service; or (2) takes unreasonab le advantag e of: a lac k of underst anding on the part of th e consumer o f the m aterial risk s, costs o r conditi ons of the p roduct or service; the ability of the cons umer to pro tect the in terest of t he consumer in select ing or using a financial p roduct or service; or the reaso nable re liance by the consumer on a covere d person to act in the in terest of the consum er. 23 Examiner s found that lenders e ngaged in ab usive acts or practices when they t ook unreasonab le advantag e of consume rs’ inabil ity to prot ect their i nterest s in selecti ng or u sing c onsumer finan cial products or servi ces. Lenders took u nreasonable ad vantage of superior informatio n in knowing that tips went to gen eral revenu e. Under the c ircumstance s and give n the misre presentati ons, cust omers lack ed the abil ity to ma ke fully in formed ch oices abou t whether and ho w much t o tip, w hich af fecte d the abi lity t o prot e ct their mon etary in terests. L ender s 22 12 U.S.C. § 5531. 23 12 U.S.C. § 5535(a)(1)(B). S ee also CFPB Policy on Ab usive Acts or Pra ctices, April 3, 2023, a vailab le at: https://www.consumerfi nance.gov/c omplianc e/supervisory - guidance/policy - statement - on - ab usivene ss/#1

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 16 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) gained unreasonab le advantage s when the y designed i nterfaces t o take advant age of co nsumers’ misim pressions, ba sed on specific con sumer rese arch they c onducted, and profi ted from ti ps that woul d not hav e been made o r were hig her than if customers had known tips went to gen eral revenu e. 2.3.5 Blocking loan acc ount closu re and co ntinuin g to debi t deposit accoun t s Examiner s found tha t l enders enga ged in decept ive acts a nd practi ces when they preven ted payche ck adva nce p roduc t consumer s from closin g their loan acco unts unt il they re solved pending d ebits, and cont inued debiti ng consumer deposit accou nts, desp ite re prese nt atio ns th at accou nts could be closed at any t ime and that lende rs would no t engage i n collecti on activity. Lenders misl ed or were likely to mi slead consume rs through confusin g and conflictin g repres entations a bout ho w to close loan accounts and th at consumer s could canc el agreeme nts and use of service s at any time, the only co nsequences of nonpayme nt being placi ng loan accoun ts on hold. C onsumer s could rea sonably in terpre t lenders’ sta temen ts to mean t hat they could cancel agree ments and se rvices at any time, alo ng with pe nding deb its, and would not be blocked f rom closing t heir loan accounts un til pending d ebits were pr ocessed. L enders’ repr esenta tions were ma teri al bec ause t hey we re lik ely to af fect c onsum er ch oice r egardi ng whethe r to use the se rvice in the first pla ce and h ow they mig ht employ fun ds diffe rently if consume rs underst ood debi ts contin ued after att e mpted acco unt closure. Examiner s also found that lender s engaged in abusive acts or prac tices whe n they too k unreas onable adva ntage of c onsumer s’ inabil ity to pr otect their in terests w hen they bl ocked consume rs from cl osing thei r loan ac counts and cont inued to atte mpt to de bit their d eposit ac c o unt s, despi te statem ents that con sumers co uld close t heir accoun ts any time and tha t lenders w ould not engage in col lection a ctivity. Consum ers cou ld no t prot ect their inte rests in selectin g or using paychec k adv an ce products bec ause t hey w ere bl ocked fr om clo sing t heir loan accou nts a nd wer e subj ect to r epeat ed de bits, d espit e repr esenta tions t hat they co uld clo se thei r loan acco unts at any t ime and le nders would not take rep ayment act ions against th em. At accou nt opening, le nders led co nsumers to be lieve they c ould close their acco unts anytime and avoid rep eated debits. But after attem pting acc ount closu re, consum ers were s ubject to r epeated debits and potenti ally to third - p arty fees. Le nders gained unreasonab le ad vantage by inducing consume rs to tak e out paychec k advance products un der false premi ses, gaini ng more loan accounts t han they oth erwise woul d have.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 17 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 2.3.6 Block ing fun ds trans fers Exami ners found that l enders eng aged in unfair acts or pr actices when t echnology fa ilures resulte d in consu mer having certain tra nsfers blocked fro m link ed deposit accounts t o other personal ac counts. Specifically, l enders off ered a payment card linke d to a part icular deposi t account in concert with the payc heck advance p roduct, and d uring a specifi c time period, c onsume rs who had not repaid the paycheck adva nces timely and had balances in the se linked account s w e re unable to access thei r funds in a t imely manne r. Len ders caused su bstantial injury because co nsumers were unable to access the ir funds i n a timely manne r and we re deni ed access to fun ds. Other inj ury included t ime spent and tr ouble and ag gravation c aused when consume rs tried t o cure the problem. C onsumers could not r easonably avoid or anti cipate th e inju ry beca use th ey wer e not wa rned of the error a nd co uld n ot resol ve it thems elves. The underlying t echnology fa ilures and th eir conse quences provided n o discern ible benefi t to consume rs or com petition.

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 18 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 3. Supervi sory D evelopm ents Set fort h below ar e select su pervision program d evelopmen ts includin g fina l rules and or ders that hav e been issu ed since t he last editi on of Supervisory Hig hlights. 3.1.1 CFPB issues f inal rul e governin g overd raft lend ing at very large finan cial ins titutions On Decem ber 12, 20 24, the CFPB issue d a final rule rela ted to overdraf t len ding. 24 The final rule upd ate s the federal r egulations g overnin g overdra ft fees for fi nancial institution s with mor e than $10 bi llion in asset s. E xten sio n s of overdra ft credi t provided by these ins titutions will now adh ere t o the consume r protecti ons requi red of sim ilarly situa ted produ cts, un less the ov erdraft fee is $5 or l ess, or otherwi se only rec overs estim ated costs a nd loss es. The rul e w ill allow consume rs to bett er comparis on shop ac ross cre dit product s and pro vides sub stantive protect ions that apply to ot her consumer cr edit. 3.1.2 CFPB orde rs fe deral supe rvisio n of Google foll owing contested d esig nation On D ecembe r 6, 202 4, t he C F PB publ ished an order e stabli shing sup ervisory authority over Google Payment Corp. 25 This was the CFPB ’ s second superviso ry designati on ord er in a contes ted matter. While Go ogle Paymen t Corp. i s already su bject to C FPB’s enf orcement jurisdic tion, th e CFPB deter mined tha t Google Pa yment C orp. met th e legal requi rements f or supervision. 3.1.3 CFPB is sues fin al rule defi ning l arger partici pants of a market fo r gene ral - use digital cons umer pay ment applications On No vemb er 21, 2 02 4, the CFPB issued a final rule to estab lish authori ty over nonb ank covered persons that are larger partici pants of a market for provid ing general - use digital consum er 24 The fin al rule is availabl e at: cfp boverdraft - r egula tory - text - and - commentary2024 - 12.pdf 25 The Dec ision and Order is avail able at: cfpbPublication- Redacted -Decision- and - Order - Designa ting - Go ogle - Payment - for - Su6EZQyM z.pdf

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 19 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) payme nt applications. 26 The rule, which t akes effect J anuary 9, 2025, will allow the CFPB to supervise these firms, which provi de widely - used paym ent walle t and funds tr ansfer ap p s. Nonbank fi rms quali fy as large r particip ants if the ir general - us e digital c onsum er payment appli cations facilitate more than 50 millio n consumer p ayment transa ctions de nominated i n U.S. do llar s per year and they are not s mall busin ess conc erns as def ined by S ma ll Busine ss Admini stration r egulatio ns. The CFPB e stimate s that nonbank larg er partici pants in t his market collect ively fac ilitated over 13 b illion s uch consumer payment tr ansactions annually. T he rule will help t he CFPB to ens ure tha t thes e com panie s follow f ede ral consumer financ ial law ju st like large banks and credit un ions alrea dy supervi sed by th e CFPB. The rule also will help the CFPB to detec t and assess risks to c onsume rs and mark ets includ ing emergi ng risk s. 26 The final rule, a s publish ed in th e Federal R egist er, is available at: Federa l Register:: Defining La rger Par ticipants of a Market for General - Us e Di gita l Consum er Pa yment Ap pli cat ions

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 20 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 4. Enforc ement Actions 4.1 Public Enforcement Ac tions The CFPB ’s supervi sory a ctivities r esulted in and support ed the belo w enforcem ent action s. 4.1.1 Comerica B ank On December 6, 2024, the CFPB sued Com erica Bank. Co merica is a T exas banking associ ation headq uartered in D allas, Texas, and is a subsidiary of C omerica Inco rporated, one of the lar gest banking as sociat ions in the country. Si nce 2008, Co merica has had an exclusi ve contr act with the Depar tment of the Treasu ry, Burea u of the Fis cal Servi ce to deliv er various g overnmen t benefi ts to consum ers throu gh a prepai d “Direct Express” d ebit card. The prepai d card is t he sole me thod for un banked cons umers to receive c e rt ain governme nt benefits, including Soc ial Security benefit s. The CFPB alleges that Comerica engag ed in unfair ac ts and pra ctices in i ts management of Direct Express by: (1) failing to provide consumers a reasonable way to obtai n effec tive a nd tim ely as si sta nce, impedin g consum ers’ acc ess to their a ccounts a nd their a bility to avail themselves of the prot ections of Regulati on E, (2) f orcing consu mers to cl ose thei r accou nts and reques t new cards, causing them to incur additional fee s instead of meeting i ts obliga tion to hon or stop pa yment requ ests; (3) fa iling to p rovide cor rect an d complet e infor mation to enro llment - fraud victi ms regardin g whether th e fraud occu rred and how to obtain remediati on; and (4) charging c onsume rs ATM fee s that they di d not owe. T he CFPB further alle ges that Comeric a repeatedly fai led to comply with t he EFTA and numerous provisi ons of its im plemen ting regula tion, Regulation E, in its treatment of D irect Expres s cardhold ers, inclu ding fa iling to tim ely inves tigate ca rdholder er ror c laims, failing to report t he results of its inv estigatio ns to card holders, an d failin g to provide ca rdhold ers with a wr itten explanat ion of its findings. The Bureau se eks permane nt inju nctive relie f, redres s for consumer s, and a c ivil money pe nalty. 27 27 The com plaint is available at: https://www.consumerfi nance.gov/ enforcement /acti ons/comeri ca - bank/

S UPERVISORY H IGHLIGHTS, ISSUE 37 (Wint er 2024) 21 SUPER VISORY HIGH LIGHT S, ISSUE 37 (WINTE R 2024) 4.1.2 Vy S tar Credit Union On Oc tober 31, 202 4, the CFP B took ac tion against Vy Star Cred it Union fo r harming consumers through i ts botc hed rollo ut of a new onl ine and mobile b anking system. In May 2022, VyS tar transi tioned to a ne w, dysfunc tional onli ne and mob ile banking pla tform that made it d ifficult for credi t union m embers to perform ba sic banki ng functi ons for we eks, with s ome featu res unava ilable for m ore tha n six mont hs. Families in curred fees and co sts beca use of these problems. The CFPB order ed V yStar t o ensure th at all con sumers are ma de whol e. VyStar m ust also pay a $1.5 million civil pe nalty to the CFPB ’s victim s relief fund. T his action ste ms from th e CFPB’s cl ose partn ership with the Na tional Cr ed it Union Admin istration. 28 28 More i nformat ion i s availa ble at: h ttps://www.co nsumerfi nance.go v/about - us/n ewsro om/cfp b - orders - vystar - credit - union - to - pay -1-5- millio n - for - il lega lly - stra nding - co nsumers - from - ac cessin g - their - money - and - accounts/