CFPB Proposes $18 Million Settlement for Alleged FCRA Violations

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On May 14, 2020, the Consumer Financial Protection Bureau (CFPB) filed a proposed stipulated final judgment of $18 million to settle allegations of violations of the Fair Credit Reporting Act (FCRA) made in a complaint against a mortgage lender, several individuals, and related companies, according to a CFPB news release.

The complaint claimed the mortgage lender violated the FCRA by obtaining consumer reports for over 7 million consumers with student loan debt from a major credit bureau between 2015 and 2017 on the false representation that they would use the information to offer mortgage loans to consumers.

The CFPB claimed the mortgage lender provided reports to several associated student loan debt-relief companies to market their services and helped create a sham entity purporting to be a mortgage brokerage to wrongfully obtain 12 million additional consumer reports between 2017 and 2019.

If entered by the court, the proposed settlement would impose an $18 million redress judgment against the California mortgage lender, ban the lender and several individuals and related companies from the debt-relief industry, and impose a total $450,001 civil money penalty against them.

The CFPB helps consumer finance markets work by identifying and addressing unnecessary regulations, making rules more effective, enforcing federal consumer financial law, and empowering consumers to take more control over their economic lives. To learn more, visit www.consumerfinance.gov.

The CFPB enforces the FCRA that governs background checks in the United States. Employment Screening Resources® (ESR) is a leading global background check provider that offers background screening services that comply with the FCRA. To learn more about ESR, visit www.esrcheck.com.

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