Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48703 

1 In 2016, about 70 percent of CFPB examinations 

did not raise issues that led the Bureau to consider 

opening an enforcement investigation. Instead, 

these matters were resolved with nonpublic 

agreements by the company to quickly fix any 

problems and provide appropriate relief to 

consumers. See infra pp. 37–39 (discussing these 

figures). See also https://

www.consumerfinance.gov/about-us/blog/how-wekeep-you-safe-consumer-financial-marketplace/. 

Estimated Total Annual Burden 

Hours: 85. 

Estimated Total Annual Cost to 

Public: $152 in recordkeeping/reporting 

costs. 

IV. Request for Comments 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden 

(including hours and cost) of the 

proposed collection of information; (c) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology. 

Comments submitted in response to 

this notice will be summarized and/or 

included in the request for OMB 

approval of this information collection; 

they also will become a matter of public 

record. 

Dated: October 13, 2017. 

Sarah Brabson, 

NOAA PRA Clearance Officer. 

[FR Doc. 2017–22648 Filed 10–18–17; 8:45 am] 

BILLING CODE 3510–22–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

Supervisory Highlights: Summer 2017 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Supervisory Highlights; notice. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau or CFPB) is 

issuing its fifteenth edition of its 

Supervisory Highlights. In this issue of 

Supervisory Highlights, we report 

examination findings in the areas of 

auto finance lending; credit card 

account management; debt collection; 

deposits; mortgage servicing; mortgage 

origination; service providers; shortterm, small-dollar lending; remittances; 

and fair lending. As in past editions, 

this report includes information on the 

Bureau’s use of its supervisory and 

enforcement authority, recently released 

examination procedures, and Bureau 

guidance. 

DATES: The Bureau released this edition 

of the Supervisory Highlights on its Web 

site on September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Adetola Adenuga, Consumer Financial 

Protection Analyst, Office of 

Supervision Policy, 1700 G Street NW., 

20552, (202) 435–9373. 

SUPPLEMENTARY INFORMATION: 

1. Introduction 

The Consumer Financial Protection 

Bureau is committed to a consumer 

financial marketplace that is fair, 

transparent, and competitive, and that 

works for all consumers. The Bureau 

supervises both bank and nonbank 

institutions to help meet this goal. The 

findings reported here reflect 

information obtained from supervisory 

activities that were generally completed 

between January 2017 and June 2017 

(unless otherwise stated). In some 

instances, not all corrective actions, 

including through enforcement, have 

been completed at the time of this 

report’s publication. 

CFPB supervisory reviews and 

examinations typically involve 

assessing a supervised entity’s 

compliance management system and 

compliance with Federal consumer 

financial laws. When Supervision 

determines that a supervised entity has 

violated a statute or regulation, 

Supervision directs the entity to 

undertake appropriate corrective 

measures, such as implementing new 

policies, changing written 

communications, improving training or 

monitoring, or otherwise changing 

conduct to ensure the illegal practices 

cease. Supervision also directs the 

entity to send refunds to consumers, pay 

restitution, credit borrower accounts, or 

take other remedial actions as 

appropriate. 

Recent supervisory resolutions have 

resulted in total restitution payments of 

approximately $14 million to more than 

104,000 consumers during the review 

period. In addition to these nonpublic 

supervisory activities, the Bureau also 

resolves violations using public 

enforcement actions.1 CFPB’s recent 

supervisory activities have either led to 

or supported two recent public 

enforcement actions, resulting in about 

$1.15 million in consumer remediation 

and an additional $1.75 million in civil 

money penalties. 

Please submit any questions or 

comments to CFPB_Supervision@

cfpb.gov. 

2. Supervisory Observations 

Recent supervisory observations are 

reported in the areas of automobile loan 

servicing, credit card account 

management, debt collection, deposits, 

mortgage origination, mortgage 

servicing, remittances, service provider 

program, short-term small-dollar 

lending, and fair lending. 

2.1 Automobile Loan Servicing 

In the Bureau’s recent auto servicing 

examinations, examiners reviewed how 

servicers are overseeing repossession 

agents and how repossessions are 

conducted. Through that work, 

examiners identified an unfair practice 

relating to repossession at one or more 

automobile servicers. 

2.1.1 Repossessions of Borrower 

Vehicles After Borrowers Make CatchUp Payments or Enter Agreements To 

Avoid Repossession 

To secure an auto loan, borrowers 

give creditors a security interest in their 

vehicles. When a borrower defaults, a 

creditor can exercise its rights under the 

contract and repossess the secured 

vehicle. Many auto servicers provide 

options to borrowers to avoid 

repossession once a loan is delinquent 

or in default. Servicers may have formal 

extension agreements that allow 

borrowers to forbear payments for a 

certain period of time or may cancel a 

repossession order once a borrower 

makes a payment. 

In one or more recent exams, 

examiners found that one or more 

entities were repossessing vehicles after 

the repossession was supposed to be 

cancelled. In these instances, the 

servicer(s) wrongfully coded the 

account as remaining delinquent, 

customer service representatives did not 

timely cancel the repossession order 

after borrowers made sufficient 

payments or entered an agreement with 

the servicer to avoid repossession, or 

repossession agents had not checked the 

documentation before repossessing and 

thus did not learn that the repossession 

had been cancelled. 

Bureau examiners concluded that it 

was an unfair practice to repossess 

vehicles where borrowers had brought 

the account current, entered an 

agreement with the servicer to avoid 

repossession, or made a payment 

sufficient to stop the repossession, 

where reasonably practicable given the 

timing of the borrower’s action. 

Supervision directed the servicer(s) to 

stop the practice. In response to our 

examiners’ findings, the servicer(s) 

informed Supervision that the affected 

consumers were refunded the 


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2 12 CFR 1026.6(b)(1)–(2). 

3Appendix G to 12 CFR part 1026, Form G– 

17(A)—Account-Opening Model Form. 4 12 U.S.C. 5536(a)(1)(B). 

5 12 U.S.C. 5536(a)(1)(B). 

6 12 CFR 1026.13. 

7 12 CFR 1026.12(b). 

8 12 CFR 1026.13(c)(1). 

9 12 CFR 1026.13(c)(2). 

10 12 CFR 1026.12(b)(1)(ii). 

11 12 CFR 1026.13(d)(2). 

12 12 CFR 1026.13(c)(2) & 1026.13(e)(1). 

13 12 CFR 1026.13(c)(2) & (e)(2). 

repossession fees. The servicer(s) also 

implemented a system that requires 

repossession agents to verify that the 

repossession order is still active 

immediately prior to repossessing the 

vehicle, for example, through a specially 

designed mobile application for that 

purpose. 

2.2 Credit Card Account Management 

Supervision reviewed the credit card 

account management operations of one 

or more supervised entities over the past 

few months. Typically, examiners assess 

advertising and marketing, account 

origination, account servicing, payments 

and periodic statements, dispute 

resolution, and the marketing, sale and 

servicing of credit card add-on products. 

Bureau examiners found that supervised 

entities generally are complying with 

Federal consumer financial laws. 

However, in one or more recent 

examinations, examiners observed that 

one or more entities violated Regulation 

Z and committed the deceptive 

practices as described below. 

2.2.1 Failure To Provide Required 

Tabular Account-Opening Disclosures 

Examiners observed that one or more 

credit card issuers violated Regulation Z 

by failing to provide the requisite 

tabular disclosures with the account 

opening materials provided to 

numerous cardholders.2 Specifically, 

the account-opening disclosures were 

missing the table set forth in Appendix 

G–17 of Regulation Z, resulting in 

consumers receiving incomplete 

disclosures.3 At one or more entities, 

management attributed this violation to 

an employee’s incorrect entry of source 

code for printing disclosures, controls 

that were not appropriately structured 

to detect errors, and the entity’s lack of 

an independent disclosure review. After 

acknowledging the violations with 

examiners, one or more entities initiated 

a review to ensure that the errors were 

limited, the root causes were further 

identified, and corrective actions were 

developed. 

2.2.2 Deceptive Misrepresentations to 

Consumers Regarding Costs and 

Availability of Pay-by-Phone Options 

During one or more examinations, 

credit card companies provided 

consumers with the opportunity to pay 

their credit card bills by mail, online, or 

in person free of charge or by using one 

of two pay-by-phone services. The first 

pay-by-phone service permitted 

consumers to make an expedited 

payment for a predetermined fee, 

credited the same day or the following 

business day. The second pay-by-phone 

service allowed consumers to arrange 

future payments options free of charge 

to be credited to the consumer’s account 

as soon as two days after the call. 

Customer service representatives were 

given a call script to read to consumers 

describing both the fee-based expedited 

payment option and the free future 

payments option. 

A review of calls between customer 

service representatives and consumers 

revealed that in one or more 

examinations representatives did not 

follow the script in its entirety and often 

read the script for expedited payments 

only. Typically, customer service 

representatives did not inform 

consumers of any free payment options 

until after the consumer authorized the 

expedited phone payment and the 

customer service representatives did not 

inform consumers that the payment 

could be paid free of charge by phone 

by not expediting when the payment 

was credited. This practice resulted in 

consumers incurring fees for expedited 

payments that could have been avoided. 

Supervision found this practice was 

deceptive because these customer 

service representatives made an implied 

misrepresentation to consumers paying 

over the phone that all of the pay-byphone services carried a fee.4

Supervision directed the entity(ies) to 

establish effective controls over 

communications to consumers, ensure 

representatives informed consumers of 

free payment options prior to 

authorization of an expedited phone 

payment, and reimburse fees to 

consumers impacted by the deceptive 

representations about the costs and 

availability of pay-by-phone options. 

2.2.3 Deceptive Misrepresentations to 

Consumers Concerning Benefits and 

Terms of Credit Card Add-On Products 

One or more entities provided its 

customer service representatives with 

call scripts that contained basic 

information about debt cancellation 

credit card add-on product(s). A review 

of calls by examiners indicated that 

customer service representatives often 

did not read the entire script, and in 

some instances, did not read the script 

at all. In one or more instances, the 

customer service representatives did not 

correct consumers’ stated erroneous 

assumptions concerning the benefits of 

the product(s), misrepresented the 

potential fees, and assured consumer(s) 

that the product(s) would avoid the 

accrual of late fees or other penalties. 

Supervision found such practices 

constituted deceptive marketing and 

sales practices by misrepresenting 

product features, such as the cost and 

coverage of the optional debt 

cancellation add-on product.5

Supervision directed these entities to 

establish effective controls over 

marketing and sales practices for the 

debt cancellation credit card add-on 

products, ensure representatives make 

accurate disclosure of the add-on 

product’s terms, conditions, and costs, 

and to reimburse the costs of the credit 

card add-on products to impacted 

consumers. 

2.2.4 Failure To Comply With Billing 

Error Resolution and Unauthorized 

Transactions 

Regulation Z requires credit card 

issuers to follow an error resolution 

process when a cardholder submits a 

billing error notice and provides that, 

during resolution, the cardholder may 

withhold payment for the disputed 

amount and the issuer shall not report 

the disputed amount as delinquent.6 In 

addition, Regulation Z also limits the 

amount a cardholder can be held liable 

for any unauthorized use.7

During one or more examinations, 

examiners observed that entities: (1) 

Failed to provide consumers with a 

timely written acknowledgement of 

receipt of a billing error notice; 8 (2) 

generally failed to timely comply with 

the billing error resolution procedures; 9

(3) failed to limit the liability of 

cardholders for unauthorized use to the 

lesser of $50 or the amount of money, 

property, labor or services obtained by 

the unauthorized use before the card 

issuer is notified; 10 (4) before a billing 

error was resolved, made or threatened 

to make an adverse credit report 

concerning the consumer’s credit 

standing, or that the amount or account 

was delinquent, because the consumer 

failed to pay the disputed amount or 

applicable related finance or other 

charges; 11 (5) failed to timely correct 

billing errors and credit consumers’ 

accounts with disputed amounts or 

related finance or other charges, as 

applicable; 12 (6) failed to send, or failed 

to timely send, consumers a correction 

notice where the issuer concluded that 

the billing error occurred as asserted; 13

(7) failed to conduct, or failed to timely 


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14 12 CFR 1026.13(c)(2) & (f). 

15 12 CFR 1026.13(c)(2) & (f)(1). 

16 15 U.S.C. 1692–1692p. 

17CFPB Bulletin 2013–08, Representations 

Regarding Effect of Debt Payments on Credit 

Reports and Scores, available at: http://

files.consumerfinance.gov/f/201307_cfpb_bulletin_

collections-consumer-credit.pdf. 

conduct, a reasonable investigation 

before determining that no billing error 

occurred; 14 or (8) failed to provide, or 

failed to timely provide, consumers 

with a written explanation for its 

determination as to why it concluded 

that a billing error did not occur.15

The root cause of these regulatory 

violations can, among other things, be 

attributed to weak oversight of service 

providers that handle dispute resolution 

for the card issuers. At one or more 

entities, management failed to perform 

sufficient due diligence of a service 

provider hired to perform intake of 

incoming phone calls from customers 

who reported billing errors and other 

disputes, and ceased doing business 

with the service provider because of 

increasing complaints about the service 

provider’s customer service. One or 

more entities failed to have sufficient 

documentation of its monitoring of 

service providers and did not audit its 

oversight of service providers. 

Supervision directed one or more 

entities to develop a plan that ensures 

the handling of billing error disputes is 

corrected, identifies all impacted 

consumers, and remediates harmed 

consumers. One or more entities were 

directed to revise their service provider 

program(s) to require document 

retention relating to service provider 

monitoring and risk assessment reviews. 

2.3 Debt Collection 

The Bureau’s Supervision program 

covers certain bank and nonbank 

creditors that originate and collect their 

own debt, as well as nonbanks that are 

larger participants in the debt collection 

market. These reviews, among other 

things, evaluate the adequacy of the 

relevant entities’ compliance 

management systems and 

communications with consumers. At 

one or more entities, examiners’ review 

of these systems and practices included 

activities conducted in a foreign 

country. During recent examinations of 

larger participants, examiners identified 

several violations of the Fair Debt 

Collection Practices Act (FDCPA),16

including unauthorized 

communications with third parties, false 

representations made to authorized 

credit card users regarding their liability 

for debts, false representations regarding 

credit reports, and communications 

with consumers at inconvenient times. 

At one or more entities, examiners 

discovered that debt collectors followed 

client instructions that led to violations 

of the FDCPA. Entities can mitigate the 

risk of an FDCPA violation if they 

determine whether client instructions 

would violate the FDCPA before 

following them. 

2.3.1 Impermissible Communications 

With Third Parties 

Under section 805(b) of the FDCPA, a 

debt collector generally may not 

communicate with a person other than 

the consumer in connection with the 

collection of a debt without permission 

from the consumer. Examiners 

determined that one or more entities did 

not confirm that the correct party had 

been contacted prior to beginning 

collection activities. As a result, one or 

more entities communicated with a 

third party in connection with the 

collection of a debt by discussing the 

debt with an authorized user of a credit 

card who was not financially 

responsible for the debt (and who was 

not otherwise a ‘‘consumer’’ under 

section 805(b)). In response to these 

findings, one or more entities enhanced 

consumer verification processes to 

include the verification of first and last 

names, and confirmation of date of birth 

or the last four digits of Social Security 

number, before disclosing the debt or 

the nature of the call to the consumer. 

Additionally, one or more entities 

revised their processes to discuss the 

debt with an authorized user only after 

explicit authorization from the 

cardholder. Lastly, the entities trained 

their collection agents on the enhanced 

policies and procedures. 

2.3.2 Deceptively Implying That 

Authorized Users Are Responsible for a 

Debt 

Under section 807(10) of the FDCPA, 

a debt collector may not use false 

representations or deceptive means to 

collect or attempt to collect any debt. 

Examiners determined that one or more 

entities violated the FDCPA by 

attempting to collect a debt directly 

from the authorized user of a credit card 

even though the authorized user was not 

financially responsible for the debt. The 

practice of soliciting payment from a 

non-obligated user in a manner that 

implies that the authorized user is 

personally responsible for the debt 

constitutes a deceptive means to collect 

a debt in violation of the FDCPA. One 

or more entities have undertaken 

remedial and corrective actions 

regarding these violations, which are 

under review by Supervision. 

2.3.3 False Representations Regarding 

the Effect on a Consumer’s Credit 

Report of Paying a Debt in Full Rather 

Than Settling the Debt in Full 

As noted above, a debt collector may 

not use false representations or 

deceptive means to collect or attempt to 

collect any debt under section 807(10) 

of the FDCPA. Examiners found that one 

or more entities made false 

representations to consumers about the 

effect on their credit score of paying a 

debt in full rather than settling the debt 

for less than the full amount. As the 

CFPB explained in a 2013 bulletin, 

representations about the impact of 

paying a debt on a consumer’s credit 

score may be deceptive. The bulletin 

states that ‘‘in light of the numerous 

factors that influence an individual 

consumer’s credit score, such payments 

may not improve the credit score of the 

consumer to whom the representation is 

being made. Consequently, debt owners 

or third-party debt collectors may well 

deceive consumers if they make 

representations that paying debts in 

collection will improve a consumer’s 

credit score.’’ 17 In response to these 

findings, one or more entities amended 

training materials to remove references 

to how a consumer’s credit score may be 

affected by either settling the debt in 

full or paying the debt in full. 

2.3.4 Communicating With Consumers 

at a Time Known To Be Inconvenient 

Under section 805(a)(1) of the FDCPA, 

a debt collector may not communicate 

with a consumer in connection with the 

collection of any debt at any unusual 

time or place or a time or place known 

or which should be known to be 

inconvenient to the consumer. 

Examiners discovered that consumers 

were contacted by one or more entities 

outside of the hours of 8:00 a.m. to 9:00 

p.m. (which, in the absence of 

knowledge to the contrary, may be 

assumed to be convenient) or at times 

consumers had previously informed the 

entities were inconvenient. These 

violations were caused by the failure to 

accurately update account notes and the 

use of auto dialers that based call 

parameters solely on the consumer’s 

area code, rather than also considering 

the consumer’s last known address. 

Supervision directed one or more 

entities to enhance compliance 

monitoring for dialer systems to ensure 

that they input system parameters 

accurately and to ensure that they 


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18 12 CFR 1005.11. 

19See 12 CFR 1005.11(b). 

20See 12 CFR 1005.11(c)(1) & (c)(2)(i). 

21See 12 CFR 1005.11(d)(1). 

22 74 FR 59033 (Nov. 17, 2009) (codified at 12 

CFR part 1005.17), available at https://

www.gpo.gov/fdsys/granule/FR-2009-11-17/E9- 

27474. 

properly monitor collectors for 

inputting and adhering to account 

notations. 

2.4 Deposits 

The CFPB continues to examine banks 

for compliance with Regulation E as 

well as review for any unfair, deceptive, 

or abusive acts or practices (UDAAPs) in 

connection with deposit accounts. As 

described in more detail below, CFPB 

examiners continue to find deceptive 

acts or practices related to deposit 

disclosures and representations that 

incorrectly inform consumers about 

fees, including conditions when certain 

fees will apply. Separately, Supervision 

concluded that one or more institutions 

were engaging in deceptive acts or 

practices by misrepresenting deposit 

overdraft protection products. 

Examiners also found unfair acts or 

practices related to conditions where 

one or more institutions froze deposit 

accounts. Finally, examiners continue to 

find issues associated with Regulation E 

error resolution investigations. 

In all cases where examiners found 

UDAAPs or violations of Regulation E, 

Supervision directed institutions to 

make appropriate changes to address the 

underlying issue(s), as well as enhance 

compliance management systems to 

prevent future violations and, where 

appropriate, to remediate consumers for 

harm they experienced. 

2.4.1 Freezing of Deposit Accounts 

Examiners found that one or more 

institutions engaged in unfair acts or 

practices by placing hard holds on 

customer accounts to stop all activity 

when the institution(s) observed 

suspicious activity. These hard holds 

resulted in the consumers’ accounts 

being locked, resulting in payments not 

being honored, deposits being rejected, 

and the consumer lacking access to his 

or her funds for as long as two weeks. 

Examiners also found that one or more 

institutions failed to clearly, 

consistently, and promptly 

communicate information about the 

nature and status of these hard holds to 

consumers. Examiners found that less 

drastic measures would have 

sufficiently addressed the suspicious 

activity concern in many instances. 

Even where the hard holds were 

appropriate, the failure to properly 

communicate with consumers 

prevented consumers from being able to 

take measures to mitigate the injury. 

Supervision directed the institution(s) 

to cease unnecessarily placing hard 

holds on consumer deposit accounts 

and to develop and implement policies 

and procedures to clearly, consistently, 

and promptly communicate with 

consumers with respect to hard holds 

placed on their accounts. 

2.4.2 Misrepresentations About 

Monthly Service Fees 

Examiners found that one or more 

institutions engaged in deceptive acts or 

practices by representing in deposit 

account fee schedules that monthly 

account service fees would be waived 

under circumstances in which those 

fees, in fact, would be assessed. One or 

more institutions offered a deposit 

product that contained a monthly 

service fee. The service fee was waived 

if consumers met certain qualifications. 

One such qualification—as described in 

the fee schedules—was if the consumer 

made ten or more payments from the 

checking account during a statement 

cycle. In fact, only debit card purchases 

and debit card payments qualified 

toward the fee waiver threshold, and 

other payments from a consumer’s 

checking account, such as ACH 

payments, did not qualify. Moreover, 

only payments that ‘‘posted’’ during the 

statement cycle qualified toward the 

waiver and payments that were initiated 

but not posted during the statement 

cycle did not qualify. The 

representations that the institution(s) 

made in the fee schedules could lead a 

reasonable consumer to believe that all 

checking-account payments initiated 

during the statement cycle would 

qualify toward the ten-payment fee 

waiver threshold, a material aspect of 

the product or service. As a result, 

Supervision cited the institution(s) for 

deceptive acts or practices. Supervision 

directed the institution(s) to ensure that 

all disclosures regarding the fee waivers 

include accurate and non-misleading 

information. 

2.4.3 Violations of Error Resolution 

Requirements 

Supervision continues to find 

violations of Regulation E’s error 

resolution requirements. As noted in the 

Fall 2014 edition of Supervisory 

Highlights, Regulation E, which 

implements the Electronic Fund 

Transfer Act, imposes specific 

requirements on financial institutions 

for how to resolve error allegations 

reported by consumers related to 

electronic fund transfers. Among other 

requirements, Regulation E requires 

financial institutions to promptly 

investigate error allegations, to provide 

timely provisional credit to consumers, 

to promptly provide consumers with 

notice of the findings of the financial 

institution’s investigation, and to allow 

consumers to review the documentation 

the financial institution relied upon in 

the course of the investigation.18

Examiners found that one or more 

institutions violated several of the error 

resolution provisions of Regulation E. 

Among other things, examiners 

observed that one or more entities 

prematurely closed investigations and 

denied claims when consumers failed to 

submit, or delayed in submitting, 

supplemental information beyond that 

which financial institutions may require 

under Regulation E.19 Examiners also 

found that the institution(s) failed to 

investigate claims and to provide 

provisional credit within 10 business 

days of receiving notice of the alleged 

error.20 Examiners further observed that 

one or more institutions refused 

consumers’ requests to review material 

relied upon by the institution(s) in 

denying error claims, and incorrectly 

informed consumers that subpoenas 

would be required to review that 

material.21 With respect to these types 

of violations, Supervision directed the 

relevant entities to take measures to 

ensure compliance with the error 

resolution provisions of Regulation E. 

2.4.4 Deceptive Statements About 

Overdraft Protection Products 

In 2010, Federal rules took effect that 

prohibited banks and credit unions from 

charging overdraft fees on ATM and 

one-time debit card transactions unless 

consumers affirmatively opted in.22

Many depository institutions provide a 

variety of overdraft products that may 

cover consumer transactions that 

overdraw accounts. 

Supervision determined that one or 

more institutions engaged in a deceptive 

act or practice by misrepresenting their 

opt-in deposit overdraft protection 

products when answering inbound 

telephone calls from consumers, 

including that: 

D The overdraft protection product 

applied to check, automated clearing 

house (ACH), and recurring bill 

payment transactions, when the 

overdraft protection product did not 

apply to those transactions; 

D The overdraft protection product 

would allow a consumer to withdraw 

more than the daily ATM cash 

withdrawal limit and be subject to only 

one overdraft fee. In actuality, a 

consumer would not have been allowed 

to surpass the daily ATM cash 


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Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48707 

23 12 CFR 1026.19(e)(3)(i), (ii). 

24 12 CFR 1026.25(c)(1). 

25 12 CFR 1026.19(e)(2)(i)(A), 1026.25(c)(1). 

26 12 CFR 1026.19(f)(1)(iv). 

27 12 CFR 1026.19(e)(1)(vi)(c). 

28 12 CFR 1026.37(c)(2)(iii), .38(c)(1). 

29 12 CFR 1026.37(a)(13)(ii). 

30 12 CFR 1026.38(f)(2), (f)(5), (h)(2), (i)(2)(ii). 

31 12 CFR 1026.36(h)(1). 

32 12 CFR 1024.41(b)(1). 

33 12 CFR 1024.41(b)(1). 

34 12 CFR 1024.41(c)(2)(ii) and (iii). 

35 12 CFR 1024.41(b)(1) and Comments 41(b)(1)– 

4.iii and 41(c)(2)(iii)–2. 

withdrawal limit, regardless of 

enrollment in the overdraft protection 

product, and it was not possible to do 

so while incurring only one overdraft 

fee; and 

D The overdraft protection product 

would take effect on the same day as 

enrollment, when the product would 

not actually take effect until the next 

day. 

Supervision determined that these 

representations misled or were likely to 

mislead a reasonable consumer 

regarding a material aspect of the 

overdraft protection product and that 

account opening disclosures or 

subsequent enrollment disclosures did 

not cure the misleading representations. 

Supervision directed one or more 

depository institutions to cease 

misrepresenting features of their 

overdraft protection products. 

2.5 Mortgage Origination 

Supervision assessed the mortgage 

origination operations of one or more 

supervised entities for compliance with 

applicable Federal consumer financial 

laws. Examiners identified instances of 

regulatory violations and one or more 

instances where supervised entities 

engaged in a deceptive practice, as 

described below. 

2.5.1 Know Before You Owe Mortgage 

Disclosure Rule 

Supervision has completed its first 

round of mortgage origination 

examinations for compliance with the 

Know Before You Owe mortgage 

disclosure rule. The Bureau stated that 

it would be sensitive to the progress 

made by supervised entities focused on 

making good faith efforts to come into 

compliance with the rule upon the 

effective date of October 3, 2015. Initial 

examination findings and observations 

conclude that, for the most part, 

supervised entities, both banks and 

nonbanks, were able to effectively 

implement and comply with the Know 

Before You Owe mortgage disclosure 

rule changes. However, examiners did 

find some violations. Listed below are 

violations found by examiners relating 

to the content and timing of Loan 

Estimates and Closing Disclosures: 

D Amounts paid by the consumer at 

closing exceeded the amount disclosed 

on the Loan Estimate beyond the 

applicable tolerance threshold; 23

D The entity(ies) failed to retain 

evidence of compliance with the 

requirements associated with the Loan 

Estimate; 24

D The entity(ies) failed to obtain and/ 

or document the consumer’s intent to 

proceed with the transaction prior to 

imposing a fee in connection with the 

consumer’s application; 25

D Waivers of the three-day review 

period did not contain a bona fide 

personal financial emergency; 26

D The entity(ies) failed to provide 

consumers with a list identifying at least 

one available settlement service 

provider, if the creditor permits the 

consumer to shop for a settlement 

service; 27

D The entity(ies) failed to disclose the 

amount payable into an escrow account 

on the Loan Estimate and Closing 

Disclosure when the consumer elected 

to escrow taxes and insurance; 28

D Loan Estimates did not include the 

date and time at which estimated 

closings cost expire; 29 and 

D The entity(ies) failed to properly 

disclose on the Closing Disclosure fees 

the consumer paid prior to closing.30

Examiners worked in a collaborative 

manner with one or more entities to 

identify the root cause of these 

violations and determine appropriate 

corrective actions, including 

reimbursement to consumers where 

tolerance violations occurred. 

2.5.2 Failure To Reimburse Unused 

Portions of a Required Service Deposit 

Where Certain Disclosure Language Was 

Used Constituted an Unfair Practice 

At one or more entities, pursuant to 

certain disclosure language a specified 

service deposit was collected from 

consumers but unused portions were 

not reimbursed when consumers 

withdrew their applications. This would 

constitute unfair acts or practices in 

those cases where the loans did not 

proceed to closing due to the entity’s 

unreasonable actions or inactions. 

Supervision directed each entity to 

conduct a review to identify impacted 

consumers. Refunds were provided to 

consumers where the loan files could 

not support retention of the service 

deposit. 

2.5.3 Deceptive Practice Involving an 

Arbitration Notice on Certain 

Residential Mortgage Loan Documents 

Under Regulation Z, a contract or 

other agreement for a consumer credit 

transaction secured by a dwelling 

(including a home equity line of credit 

secured by the consumer’s principal 

dwelling) may not include terms that 

require arbitration or any other nonjudicial procedure to resolve any 

controversy or settle any claims arising 

out of the transaction.31

Despite this prohibition, at one or 

more entities examiners identified 

template language for certain residential 

loan document(s) containing a notice 

that the note is subject to arbitration. 

Supervision concluded that use of the 

arbitration-related notice constitutes a 

deceptive act or practice since it is 

likely to mislead a reasonable consumer 

into believing that a claim arising under 

the residential loan document must be 

submitted to arbitration. After having 

viewed the notice, a consumer would 

have been more likely to agree to postdispute arbitration or to fail to pursue 

judicial remedies under the mistaken 

belief that arbitration was required. 

Supervision directed one or more of the 

entities to cease further use of the 

template. 

2.6 Mortgage Servicing 

2.6.1 Requirements To Help Borrowers 

Complete Loss Mitigation Applications 

Regulation X provides important 

process protections for borrowers in 

financial distress who apply for a 

foreclosure alternative. Specifically, it 

requires mortgage servicers to exercise 

reasonable diligence in obtaining 

documents and information to complete 

a loss mitigation application.32 A 

complete loss mitigation application 

includes all the information that the 

servicer requires from a borrower in 

evaluating applications for the loss 

mitigation options available to the 

borrower.33

While Regulation X permits a servicer 

to offer a loss mitigation option based 

on a borrower’s incomplete application 

under certain circumstances,34 the 

servicer still must act with reasonable 

diligence to collect the information 

needed to complete the application.35

For example, in the context of a shortterm payment forbearance program 

offered based on an incomplete loss 

mitigation application, reasonable 

diligence could include notifying the 

borrower that the borrower is being 

offered a payment forbearance program 

based on an evaluation of an incomplete 

application and that the borrower 

retains the option of completing the 

application to receive a full evaluation 

of all loss mitigation options available to 


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48708 Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 

36Comment 1024.41(b)(1)–4.iii. 

37Comment 1024.41(b)(1)–4.iii. 

38 12 CFR 1024.41(b)(1). 

39 12 U.S.C. 5536(a)(1). 

40 12 CFR 1026.36(h)(2). 

41See Supervisory Highlights: Winter 2013, at 6, 

available at http://files.consumerfinance.gov/f/ 

201401_cfpb_supervision-highlights.pdf. 

42See 78 FR 30662 (May 22, 2013) (codified at 12 

CFR part 1005), available at http://www.gpo.gov/ 

fdsys/pkg/FR-2013-05-22/pdf/2013-10604.pdf. 

43Regulation E implements the Electronic Fund 

Transfer Act (EFTA). 

44 15 U.S.C. 1693o–1(a)(1). 

the borrower.36 Near the end of the 

program, and prior to the end of the 

forbearance period, it may also be 

necessary for the servicer to contact the 

borrower to determine if the borrower 

wishes to complete the application and 

proceed with a full loss mitigation 

evaluation.37 Generally, the reasonable 

diligence requirement helps address the 

concern that borrowers offered a shortterm payment forbearance program or 

short-term repayment plan may be 

experiencing a hardship, for which 

other, longer-term loss mitigation 

solutions might be more appropriate 

given their individual circumstances. 

In recent exams, examiners found that 

one or more servicers received oral 

incomplete loss mitigation applications 

and pre-approved borrowers for shortterm payment forbearance programs 

based on those applications. However, 

the servicer(s) did not notify borrowers 

of their right to complete the application 

and did not separately request other 

information needed to evaluate for all 

the other loss mitigation options offered 

by the owner or assignee of the loan. 

And near the end of the program, and 

prior to the end of the short-term 

payment forbearance period, the 

servicer(s) failed to conduct outreach to 

determine whether borrowers wished to 

complete the application and proceed 

with a full loss mitigation evaluation. 

Supervision determined that the 

servicer(s) violated Regulation X by 

failing to exercise reasonable diligence 

in obtaining documents and information 

to complete a loss mitigation 

application.38 Supervision directed the 

servicer(s) to implement policies and 

procedures to ensure that the servicer(s) 

exercise reasonable diligence in 

obtaining documents and information to 

complete a loss mitigation application 

for borrowers entering into short term 

payment forbearance programs based on 

incomplete applications, including by 

contacting the borrowers near the end of 

the program, and prior to the end of the 

forbearance period. 

2.6.2 Broad Waivers in Short Sale and 

Cash-for-Keys Agreements 

Supervision previously identified 

broad waiver of rights clauses in 

forbearance, loan modification and 

other loss mitigation options as 

violating the Dodd-Frank Act’s 

prohibition against unfair or deceptive 

acts or practices.39 Supervision 

determined such waivers to be 

deceptive where reasonable consumers 

could construe the waivers as barring 

them from bringing claims in court— 

including Federal claims—related to 

their mortgages. Regulation Z states that 

a ‘‘contract or other agreement relating 

to a consumer credit transaction secured 

by a dwelling . . . may not be applied 

or interpreted to bar a consumer from 

bringing a claim in court pursuant to 

any provision of law for damages or 

other relief in connection with any 

alleged violation of any Federal law.’’ 40

Supervision also determined broad 

waivers to be unfair insofar as they are 

offered in a ‘‘take it or leave it’’ fashion 

in the ordinary course of offering loss 

mitigation agreements, rather than in 

the context of resolution of a contested 

claim or another individualized analysis 

of the servicer’s risks and the 

consumer’s potential claims.41

Supervision continues to find broad 

waivers of rights in loss mitigation 

agreements. For example, in exchange 

for a short sale agreement, one or more 

servicers required consumers to 

completely waive, release, and 

relinquish any claims of any nature 

against the servicer(s) arising out of or 

relating to the mortgage note and any 

obligations thereunder, and to agree that 

they had no defenses to payment in full 

under the note. Supervision determined 

the waiver to be deceptive and required 

the servicer(s) to remove it from the 

agreements. 

In one or more servicing exams, 

Supervision also identified blanket 

waivers in cash-for-keys agreements that 

gave borrowers the opportunity to 

receive a payment in exchange for their 

commitment to vacate the property by a 

date certain, thereby avoiding eviction 

proceedings. The servicer(s) presented 

the waivers as take-it-or-leave-it 

boilerplate and a reasonable borrower 

would have construed them to broadly 

waive all claims or defenses including 

any in connection with the original 

credit transaction that the borrower 

might have asserted against the 

servicer(s). Supervision determined the 

waiver to be deceptive and unfair, and 

directed the servicer(s) to remove all 

such waivers from the agreements. 

2.7 Remittances 

The CFPB continues to examine both 

large banks and nonbanks for 

compliance with the CFPB’s 

amendments to Regulation E governing 

international money transfers (or 

remittances).42 Regulation E, Subpart B 

(or the Remittance Rule) provides 

protections, including disclosure 

requirements, and error resolution and 

cancellation rights to consumers who 

send remittance transfers to other 

consumers or businesses in a foreign 

country.43 The amendments implement 

statutory requirements set forth in the 

Dodd-Frank Act. 

CFPB’s examination program for both 

bank and nonbank remittance providers 

assesses the adequacy of each entity’s 

CMS for remittance transfers. These 

reviews also check for providers’ 

compliance with the Remittance Rule 

and other applicable Federal consumer 

financial laws. Supervision directed 

entities to make appropriate changes to 

compliance management systems to 

prevent future violations and, where 

appropriate, to remediate consumers for 

harm they experienced. 

2.7.1 International Top-Up and Bill 

Pay Services 

Examiners found that one or more 

supervised entities violated section 

919(a)(1) 44 of EFTA and applicable 

provisions of Regulation E by failing to 

treat international mobile top-up 

services in excess of $15 as a remittance 

transfer. An international mobile top-up 

service converts funds from consumers 

in the United States to airtime on a 

phone account based on the usage and 

rate plan selected by the owner of the 

phone residing in a foreign country. The 

entirety of these transactions occurs 

exclusively in currencies up until the 

point funds are received by the 

international cellphone carrier. The 

entity(ies) failed to provide the 

disclosures, cancellation, or error 

resolution rights to international top-up 

consumers required by EFTA and 

Regulation E. 

Similarly, one or more institutions 

violated section 919(a)(1) of EFTA and 

applicable provisions of Regulation E by 

failing to treat international bill 

payment services in excess of $15 as 

remittance transfers and, as a result, 

failed to comply with the required 

disclosure, error resolution, and 

cancellation requirements of the 

Remittance Rule. Supervision directed 

entities to make appropriate changes to 

their CMS in order to prevent future 

violations. 


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Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48709 

45Title XIV Final Rule updates effective January 

10, 2014, with the exception of the appraisal 

requirements effective for applications received on 

or after January 18, 2014. 

46 12 CFR 1026.41(d)(2)(ii); (d)(4). 

47Consumer Experiences with Debt Collection 

(Jan. 2017) at 19, available at http://

files.consumerfinance.gov/f/documents/201701_

cfpb_Debt-Collection-Survey-Report.pdf. 

48Semi-annual report of the Consumer Financial 

Protection Bureaus (Fall 2016) at 31, available at 

https://www.consumerfinance.gov/documents/ 

1977/122016_cfpb_SemiAnnualReport.pdf. 

2.8 Service Provider Program 

The Spring 2017 edition of 

Supervisory Highlights described 

Supervision’s service provider program, 

which involves the direct examination 

of service providers, particularly in the 

mortgage origination and mortgage 

servicing markets. Examiners are 

focusing on the structure, operations 

and compliance management systems of 

various service providers, as well as 

certain other targeted areas. 

2.8.1 Deficient Mortgage Periodic 

Statements 

Examiners reviewed whether one or 

more service provider(s) adequately 

considered certain requirements of the 

Title XIV Final Rule in developing 

products for mortgage servicers.45

Examiners found that the service 

provider(s) developed a mortgage 

servicing information technology (IT) 

system functionality that failed to 

implement certain Regulation Z 

requirements for periodic statements. 

The service provider(s)’ billing files 

failed to list the total sum of any fees or 

charges imposed, and the transaction 

activity that occurred since the last 

statement.46 Moreover, the service 

provider(s) did not adequately consider 

client concerns about the issue. 

Supervision concluded that these 

weaknesses contributed to the clients’ 

violations of Regulation Z and directed 

the service provider(s) to implement 

policies and procedures that span 

systems design and application controls 

to ensure that the billing files made 

available through the mortgage servicing 

IT system functionality enable 

compliance with Regulation Z. In 

addition, Supervision directed the 

service provider(s) to ensure that when 

clients communicate potential 

regulatory issues, the service provider(s) 

analyze and implement changes as 

appropriate to enable users of the 

mortgage servicing IT system 

functionality to comply with Regulation 

Z. 

2.9 Short-Term, Small-Dollar Lending 

The Bureau’s Supervision program 

covers entities that offer or provide 

payday loans. Such entities often offer 

other short-term, small dollar (STSD) 

products to consumers as well such as 

single payment, installment, or auto or 

vehicle title loans. During the 

examinations of STSD entities, 

examiners identified CMS weaknesses 

and violations of Federal consumer 

financial law, including the Dodd-Frank 

Act’s prohibition on UDAAPs. 

Highlighted below are some of the 

UDAAP findings in recent examinations 

regarding collection practices, 

marketing representations, 

representations regarding use of 

references, and payment practices. 

2.9.1 Short-Term, Small-Dollar Debt 

Collection 

As noted in the Spring 2014 

Supervisory Highlights, a continued 

focus of the CFPB’s short-term, smalldollar lending examination program is 

how lenders collect consumer debt. 

Since then, we have learned that 11 

percent of consumers who indicated 

that they had been contacted about a 

debt in collection reported attempts to 

collect on a payday loan.47 Nearly ten 

percent of all debt collection complaints 

handled by the CFPB are related to 

payday loans.48 Examiners have 

identified a range of illegal collections 

practices by small-dollar lenders, some 

of which are highlighted below. 

Workplace Collection Calls 

Examiners found that one or more 

entities, in the course of collecting their 

own debt, called borrowers at their 

places of employment. The entity(ies) 

placed repeated calls to borrowers at 

work even after borrowers asked the 

lenders to stop calling them at work or 

told the lenders that the borrowers’ 

employers did not allow such calls. 

Examiners determined that this 

collection activity constituted an unfair 

act or practice. The practice of 

continuing to call borrowers repeatedly 

at the workplace after requests to stop 

causes or is likely to cause substantial 

injury because continued contact may 

result in negative employment 

consequences to the borrower. 

Borrowers cannot avoid the injury when 

the lenders continue to make repeated 

calls after the borrowers requested that 

they stop. Where the lender has been 

expressly told to stop contacting the 

consumer at work or that the employer 

prohibits such calls, the harm to 

consumers from continued calling 

outweighs any countervailing benefits to 

consumers and competition. One or 

more lenders have undertaken remedial 

and corrective actions regarding these 

violations, which are under review by 

Supervision. 

Repeated Collection Calls to Third 

Parties 

Examiners observed one or more 

entities routinely making repeated calls 

to third parties, including personal and 

work references that borrowers listed on 

their loan applications. In some 

instances, one or more entities 

repeatedly requested that the third 

parties relay messages to delinquent 

borrowers in a manner that disclosed or 

risk disclosing the debt. The loan 

applications required consumers to list 

the names and numbers of third parties 

and, in some instances, disclosures 

provided to consumers conveyed that 

the individuals listed would be 

contacted by the entity(ies) only as part 

of the origination and underwriting 

process. The collection calls to third 

parties were not made for the purpose 

of locating the borrowers. 

Supervision determined that these 

collection activities constituted unfair 

acts or practices. Through these calls, 

the entity(ies) caused or was likely to 

cause substantial injury because the 

entity(ies) either disclosed or risked 

disclosing borrowers’ default or 

delinquency to third parties. The 

consumer injury associated with the 

calls could not be reasonably avoided 

because the borrowers were not aware 

that the lenders would contact 

references or other third parties for debt 

collection purposes, nor were they 

aware that one or more lenders would 

continue to call such references after 

requests to stop. The benefits to 

consumers and to competition did not 

outweigh the injury; the entities had the 

borrower’s location information and 

therefore had other ways to reach 

consumers without disclosing or risking 

disclosure of the borrowers’ default or 

delinquency to third parties. One or 

more entities have undertaken remedial 

and corrective actions regarding these 

violations, which are under review by 

Supervision. 

Misrepresentations in Collections 

Examiners observed one or more 

entities in the course of collecting 

delinquent or defaulted loans making 

statements to borrowers that they must 

immediately contact the lenders to 

avoid additional collection activity, 

including being visited at home or work. 

In fact, the entity(ies) did not actually 

conduct such in-person collection visits. 

Supervision concluded these 

representations constituted deceptive 

acts or practices. Delinquent consumers 

could reasonably interpret the 

entity(ies)’ statements to mean that inVerDate Sep<11>2014 15:13 Oct 18, 2017 Jkt 244001 PO 00000 Frm 00031 Fmt 4703 Sfmt 4703 E:\FR\FM\19OCN1.SGM 19OCN1

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48710 Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 

person visits to the consumers’ place of 

employment or home would take place 

if the consumers did not immediately 

contact the entity(ies). The 

representations were material to 

consumers because they could cause 

consumers to change their behavior to 

avoid the promised visits. One or more 

entities agreed to modify their collection 

practices to comply with Federal 

consumer financial laws. 

2.9.2 Marketing Misrepresentations 

About Small Dollar Loan Products 

No Credit Check 

Examiners observed that one or more 

entities advertised that consumers could 

receive loans without undergoing credit 

checks. However, these entity(ies) 

obtained consumer reports from 

specialty consumer reporting companies 

during their underwriting processes and 

sometimes denied loans to consumers 

based on the information in the reports. 

Supervision concluded that this 

conduct constituted deceptive acts or 

practices. The advertisements were 

deceptive because they were likely to 

mislead reasonable consumers into 

believing that no credit inquiries would 

be conducted and thus, they could 

receive a loan without a credit check. 

These misrepresentations were likely to 

influence consumers’ decisions to 

choose to apply for the loans. 

Supervision directed the one or more 

entities to cease advertising that 

consumers could receive loans without 

credit checks. 

Availability of Products and Services 

Examiners observed that one or more 

entities advertised products and 

services in outdoor signage that the 

entity(ies) did not, in fact, offer. They 

consisted of products and services that 

the lenders had not offered for several 

years but would be of interest to payday 

loan customers. Supervision concluded 

that by advertising products and 

services the entity(ies) did not, in fact, 

offer, the lenders engaged in deceptive 

acts or practices. A reasonable consumer 

could interpret the outdoor advertising 

to mean that the consumers who wished 

to purchase the advertised services 

could do so inside the stores. The 

representations were material because 

they impacted a consumer’s conduct in 

terms of whether to visit the stores. 

Supervision directed the one or more 

entities to cease advertising products 

and services that they did not offer. 

Comparisons to Competitors 

Examiners observed one or more 

entities advertising that many of their 

products and services had substantially 

lower fees than their competitors’ 

products and services. The entity(ies), 

however, did not have substantiation to 

support these claims. The entity(ies) 

relied on out-of-date internal analyses 

that only covered fees for a small 

number of products and services and 

did not reflect current rates, products, or 

services or those of their competitors. 

Supervision concluded that by making 

these misleading comparisons, the 

entity(ies) engaged in deceptive acts or 

practices. The representations were 

likely to mislead reasonable consumers 

into believing that the entity(ies) had a 

basis for claiming that consumers would 

pay lower fees for the products and 

services identified in the advertisement. 

This misrepresentation was material 

because it likely influenced consumers’ 

decisions to obtain these products and 

services from the entity(s) over other 

short-term, small-dollar lenders. 

Supervision directed one or more 

entities to cease advertising that their 

fees were lower than their competitors, 

absent adequate substantiation. 

Ability To Apply Online 

Examiners observed one or more 

entities representing on their Web sites 

that consumers may ‘‘apply online’’ by 

completing lengthy online forms. The 

forms solicited all or most of the 

information that a consumer would 

typically submit in order to apply for a 

short-term, small-dollar loan. The forms 

also permitted consumers to list most 

states as their home State, suggesting 

that an application for an online loan 

was available to consumers nationwide. 

In fact, consumers could not apply 

online because the entity(ies) only 

originate loans at their physical store 

front locations and do not originate 

loans based on the purported online 

loan applications. Consumers could 

only receive a loan from the lenders if 

they visited storefront locations. In 

addition, the entity(ies) only extends 

credit in a small number of States where 

they operate, not nationwide. 

Supervision determined that the 

entity(ies)’ representations constituted 

deceptive acts or practices. Consumers 

acting reasonably were likely to view 

the ‘‘apply online’’ advertisements on 

the lenders’ Web sites and 

comprehensive online applications as 

invitations to apply for, and receive, 

loans online. The representations were 

material because had consumers 

understood that they could not obtain a 

loan from the entity(ies) based on where 

they lived or that would be required to 

visit a storefront location to obtain a 

loan, many consumers would decide not 

to submit the purported application 

forms with detailed contact and 

financial information, and instead seek 

out other loan options. Supervision 

directed the one or more entities to 

revise their Web sites and other 

marketing materials. 

2.9.3 Misrepresentations Regarding 

Use of References Provided by 

Borrowers in Small Dollar Loan 

Applications 

Examiners observed one or more 

entities making false representations 

regarding the use of information 

provided by consumers in loan 

applications. The entity(ies) required 

applicants to provide names of 

references, including work colleagues, 

neighbors, and family members, on the 

loan applications. On its loan 

applications, the entity(ies) represented, 

directly and by implication, that the 

references would only be contacted to 

verify information and evaluate 

creditworthiness in connection with the 

consumers’ loans. However, the 

entity(ies) also contacted the applicants’ 

references to market loan products to 

them. Supervision concluded that the 

entity(ies), by misleading consumers 

about how they would use the 

consumers’ references, engaged in 

deceptive acts or practices. A consumer 

acting reasonably under the 

circumstances could interpret the loan 

applications to mean that the entity(ies) 

would only contact references in 

connection with the consumers’ loans 

and that the entity(ies) would not 

market their services to the individuals 

identified by consumers as references. 

The representations were material 

because they were likely to impact 

consumer behavior. For example, if 

borrowers were aware that the 

entity(ies) makes marketing calls to the 

references listed on applications, 

borrowers may provide different 

references or not apply for the loan at 

all. Supervision directed one or more 

lenders to ensure that all disclosures 

regarding the collection and use of 

references do not include any false or 

misleading information. 

Examiners also observed one or more 

entities representing, directly or by 

implication, in loan applications that 

the reference information provided by 

borrowers would be used only to 

contact references regarding the 

borrowers’ loan applications. The 

entity(ies) indicated that these 

references would be ‘‘checked,’’ 

implying that they would be contacted 

only at loan origination. Instead, the 

entity(ies) repeatedly contacted the 

references when the borrowers’ loans 

became delinquent. Supervision 

concluded that these representations 

constituted deceptive acts or practices. 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48711 

49See Supervisory Highlights Mortgage Servicing 

Special Edition 2016, at 5, available at http://

files.consumerfinance.gov/f/documents/Mortgage_

Servicing_Supervisory_Highlights_11_Final_web_

.pdf. 

50See related Consent Order, available at http:// 

www.consumerfinance.gov/documents/4820/ 

062017_cfpb_Fay_Servicing-consent_order.pdf. 

The entity(ies) applications were likely 

to mislead consumers acting reasonably 

under the circumstances by creating the 

net impression that references would be 

contacted only at origination. This 

representation was material because 

borrowers might have supplied other 

names of references or not applied for 

loans at all if they had known their 

references would be contacted for debt 

collection purposes. Supervision 

directed one or more entities to review 

all disclosures regarding the collection 

and use of references, including 

references listed by borrowers on loan 

applications, and to ensure that the 

disclosures do not include any false or 

misleading information. 

2.9.4 Small Dollar Lending 

Unauthorized Debits and Overpayments 

Examiners observed that one or more 

entities debited the accounts of 

borrowers who had already paid their 

debts. Under the applicable loan 

agreements, the entity(ies) was 

permitted to initiate ACH debits from 

the accounts of borrowers whose loans 

were past due. However, one or more 

entities sought payment through the 

ACH system from the accounts of 

borrowers who had already paid their 

loans by making cash payments at 

branch locations. Supervision 

concluded that failing to implement 

adequate processes to reasonably avoid 

unauthorized charges of, debits to, and 

overpayments by borrowers constituted 

unfair acts or practices. The failure to 

prevent successful and unsuccessful 

payment attempts to the accounts of 

borrowers who paid their debts caused 

substantial injury in the form of 

overpayments and fees. Consumers 

could not avoid this injury because they 

were not aware, regardless of whether 

they were making payments in response 

to collection efforts, that ACH debits 

had been initiated. The injury to 

consumers from failing to have adequate 

processes to avoid the unauthorized 

charges, debits and overpayments 

outweighs the benefits to consumers or 

competition, given that implementing 

such processes would not involve 

excessive costs to the entity(ies). One or 

more entities have undertaken remedial 

and corrective actions regarding these 

violations, which are under review by 

Supervision. 

One or more entities also failed to 

implement adequate processes to 

accurately and promptly identify and 

refund borrowers who paid more than 

they owed, either in person at stores or 

via the ACH network. Several 

consumers did not receive refunds until 

examiners alerted the entity(ies) to the 

overpayments, which in some cases was 

almost a year after the borrowers made 

the overpayments. Supervision 

concluded that by failing to implement 

adequate processes to accurately and 

promptly monitor, identify, correct, and 

refund overpayments by consumers, the 

entity(ies) engaged in unfair acts or 

practices. The acts or practices caused 

injury to borrowers who have paid their 

debts because a number of consumers 

were deprived of their funds for 

extended periods of time. They could 

not avoid the injury because they were 

unaware that the entity(ies) would 

double debit their accounts and the 

consumers have no control over the 

lenders’ refund process. The injury to 

borrowers from failing to have adequate 

processes to refund borrowers 

outweighs the benefits to them or to 

competition, given that implementing 

such processes would not involve 

excessive costs to the entity(ies). One or 

more entities have undertaken remedial 

and corrective actions regarding these 

violations, which are under review by 

Supervision. 

2.10 Fair Lending 

2.10.1 Mortgage Servicing 

As part of its fair lending work, the 

Bureau seeks to ensure that 

creditworthy consumers have access to 

the full array of appropriate options 

when they have trouble paying their 

mortgages, without regard to any 

prohibited basis. Mortgage servicing, 

and specifically default servicing, may 

introduce fair lending risks because of 

the complexity of certain processes, the 

range of default servicing options, and 

the discretion that can sometimes exist 

in evaluating and selecting among 

available default servicing options. 

In mortgage servicing, our supervisory 

work has included use of the Mortgage 

Servicing Exam Procedures and the 

ECOA Baseline Modules, both of which 

are part of the CFPB Supervision and 

Examination Manual. Examination 

teams use these procedures to conduct 

ECOA Baseline Reviews, which evaluate 

institutions’ compliance management 

systems (CMS), or ECOA Targeted 

Reviews, which are more in-depth 

reviews of activities that may pose 

heightened fair lending risks to 

consumers. As discussed in the 

Mortgage Servicing Special Edition of 

Supervisory Highlights,49 published in 

June 2016, these exam procedures 

contain questions about, among other 

things, the fair lending training of 

servicing staff, fair lending monitoring 

of servicing, and servicing of consumers 

with limited English proficiency. 

In one or more ECOA targeted reviews 

of mortgage servicers, CFPB examiners 

found weaknesses in fair lending CMS. 

In general, examiners found deficiencies 

in oversight by board and senior 

management, monitoring and corrective 

action processes, compliance audits, 

and oversight of third-party service 

providers. 

In one or more examinations, data 

quality issues, which were related to a 

lack of complete and accurate loan 

servicing records, made certain fair 

lending analyses difficult or impossible 

to perform. Examiners attributed these 

data quality issues to significant 

weaknesses in CMS-related policies, 

procedures, and service provider 

oversight. 

Separately, fair lending analysis at 

one or more mortgage servicers was 

affected by a lack of readily-accessible 

information concerning a borrower’s 

ethnicity, race, and sex information that 

had been collected pursuant to 

Regulation B or Regulation C and 

transferred to the servicer. One or more 

mortgage servicers acknowledged the 

importance of retaining in readilyaccessible format—for the express 

purpose of performing future fair 

lending analyses—ethnicity, race, and 

sex data that it had received in the 

borrower’s origination file. 

3. Remedial Actions 

3.1 Public Enforcement Actions 

3.1.1 Fay Servicing 

On June 7, 2017, the CFPB announced 

an enforcement action against Fay 

Servicing for failing to provide mortgage 

borrowers with certain protections 

against foreclosure that are required by 

law.50 The Bureau found that Fay 

violated the CFPB’s servicing rules by 

keeping borrowers in the dark about 

critical information about the process of 

applying for foreclosure relief. As part 

of the requirements for keeping 

borrowers informed, servicers generally 

must send an acknowledgement notice 

when they receive an application for 

foreclosure relief. The notice must state 

whether and what additional documents 

or information are required from the 

borrower to complete the application. 

After a borrower completes the 

application, servicers must also 

generally send an evaluation notice 

spelling out what foreclosure relief 

options they are offering, the deadline to 


rmajette on DSKBCKNHB2PROD with NOTICES
48712 Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 

51See Supervisory Highlights: Summer 2015, at 

27, available at http://files.consumerfinance.gov/f/ 

201506_cfpb_supervisory-highlights.pdf. 

52For more information regarding the evaluation 

factors, see CFPB blog titled ‘‘How we keep you safe 

in the consumer financial market place’’ available 

at https://www.consumerfinance.gov/about-us/blog/ 

how-we-keep-you-safe-consumer-financialmarketplace/. 

accept or reject the offer, and the rights 

borrowers have to appeal a servicer’s 

decision to deny certain types of relief. 

Fay Servicing failed to send or timely 

send both acknowledgment and 

evaluation notices with the relevant, 

correct information, putting the onus on 

borrowers to try to determine what else 

they had to do to attempt to save their 

homes or otherwise avoid foreclosure. 

The Bureau also found instances where 

the servicer illegally launched or moved 

forward with the foreclosure process 

while borrowers were actively seeking 

help to save their homes. The CFPB has 

ordered Fay Servicing to provide timely 

and accurate acknowledgment and 

evaluation notices, to solicit certain 

consumers for available loss mitigation 

options and pay up to $1.15 million to 

harmed borrowers. 

3.1.2 Nationstar Mortgage LLC, d/b/a 

Mr. Cooper 

On March 15, 2017, the Bureau 

announced an enforcement action 

against Nationstar Mortgage LLC, d/b/a 

Mr. Cooper (Nationstar) for violating the 

Home Mortgage Disclosure Act (HMDA) 

by consistently failing to report accurate 

data from 2012 through 2014, under the 

version of the HMDA rule that predates 

the creation of the CFPB. 

Through its supervision process, the 

Bureau found that Nationstar’s HMDA 

compliance systems were flawed and 

generated mortgage lending data with 

significant, preventable errors. 

Nationstar also failed to maintain 

detailed HMDA data collection and 

validation procedures, and failed to 

implement adequate compliance 

procedures. It also created reporting 

discrepancies by failing to maintain 

consistent data definitions among its 

various lines of business. 

Nationstar has a history of HMDA 

non-compliance. In 2011, the 

Commonwealth of Massachusetts 

Division of Banks reached a settlement 

with Nationstar to address HMDA 

compliance deficiencies. The loan file 

samples reviewed by the Bureau 

showed substantial error rates in three 

consecutive reporting years, even after 

the settlement with the Massachusetts 

Division of Banks. In the samples 

reviewed, the Bureau found error rates 

of 13 percent in 2012, 33 percent in 

2013, and 21 percent in 2014. 

The Bureau’s consent order requires 

Nationstar to pay a $1.75 million 

penalty to the Bureau’s Civil Penalty 

Fund. Nationstar must also review, 

correct, and make available its corrected 

HMDA data from 2012–14. In addition, 

Nationstar must assess and undertake 

any necessary improvements to its 

HMDA compliance management system 

to prevent future violations. The action 

includes the largest HMDA civil penalty 

imposed by the Bureau to date, which 

stems from Nationstar’s market size, the 

substantial magnitude of its errors, and 

its history of previous violations. 

3.2 Non-Public Supervisory Actions 

In addition to the public enforcement 

actions above, recent supervisory 

activities have resulted in 

approximately $14 million in restitution 

to more than 104,000 consumers. These 

nonpublic supervisory actions generally 

have been the product of CFPB 

supervision and examinations, often 

involving either examiner findings or 

self-reported violations of Federal 

consumer financial law during the 

course of an examination. Recent 

nonpublic resolutions were reached in 

auto finance origination matters. 

4. Supervision Program Developments 

4.1 Use of Enforcement and 

Supervisory Authority 

In the Summer 2015 edition of 

Supervisory Highlights, the Bureau 

provided information on its Potential 

Action and Request for Response 

(PARR) letter process and the Action 

Review Committee (ARC) process. The 

ARC process is used by senior 

executives in the Bureau’s Division of 

Supervision, Enforcement, and Fair 

Lending to determine through a 

deliberative and rigorous process 

whether matters that originate from 

examinations will be resolved through 

confidential supervisory action or be 

further investigated for possible public 

enforcement action.51

In June 2017, the Bureau released a 

blog which noted that in fiscal year 

2016, about one-third of those 

examinations that were considered 

through the ARC process were 

determined appropriate for further 

investigation for possible public 

enforcement action. This equated to 

approximately 10 percent of all 

examinations in fiscal year 2016.52

More detailed information on the 

number of ARC decisions is presented 

in Table 1 below. This table reflects the 

total number of ARC decisions and their 

outcomes for the fiscal years 2012 

through 2016. The numbers in the table 

do not reflect all supervisory 

examinations or all enforcement 

investigations in any given year. 

Instead, they show the ARC decisions 

made on the subset of matters that go 

through the ARC process, which are 

generally those examinations in which 

the exam team found evidence of 

significant violations of Federal 

consumer financial law. These numbers 

are also reflective in part of the Bureau’s 

risk-based approach to supervision. 

Pursuant to that approach, the Bureau 

concentrates its efforts on institutions 

and product lines that it determines 

through its analytical prioritization 

process pose the greatest risk to 

consumers. 

As reflected in the table, since 2014, 

the number of matters raising issues that 

trigger the ARC process and the number 

of those matters that are determined 

appropriate for further investigation for 

possible public enforcement action 

moving to enforcement—in whole or in 

part—have remained somewhat 

consistent. Taken together, about a third 

of the ARC decisions in fiscal years 

2014 to 2016 were determined 

appropriate for further investigation for 

possible public enforcement action. Any 

violations identified in the remaining 

matters were determined appropriate to 

be resolved through confidential 

supervisory action. 

TABLE 1—ARC DECISIONS THROUGH FY 2016 

[September 30, 2016] 

Outcome FY 12 * FY 13 FY 14 FY 15 FY 16 Total % of total 

Determined appropriate for further investigation for possible public enforcement 

action .................................................... 7 10 11 9 8 45 24.59 

Determined appropriate for resolution 

through confidential supervisory action 7 6 32 41 31 117 63.93 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 48713 

53For additional information regarding HMDA 

data collection and reporting reminders for 2017, 

see Supervisory Highlights, Fall 2016, available at 

http://files.consumerfinance.gov/f/documents/ 

Supervisory_

Highlights_Issue_13__Final_10.31.16.pdf. 

54The ‘‘HMDA agencies’’ refers collectively to the 

CFPB, the Office of the Comptroller of the Currency 

(OCC), the Federal Deposit Insurance Corporation 

(FDIC), the FRB, the National Credit Union 

Administration (NCUA) and the Department of 

Housing and Urban Development (HUD). 

55See the related Guidelines, available at https:// 

s3.amazonaws.com/files.consumerfinance.gov/f/ 

documents/201708_cfpb_ffiec-hmda-examinertransaction-testing-guidelines.pdf. 

TABLE 1—ARC DECISIONS THROUGH FY 2016—Continued 

[September 30, 2016] 

Outcome FY 12 * FY 13 FY 14 FY 15 FY 16 Total % of total 

Determined appropriate, in part for further investigation for possible public 

enforcement, and in part for resolution 

through confidential supervisory action ** .................................................... 0 1 8 5 7 21 11.48 

Total .................................................. 14 17 51 55 46 183 100.00 

* Reflects part of the Fiscal Year; the ARC process was first implemented partway through FY 2012. 

** With respect to some exams, some findings are referred to supervision and some findings are referred to enforcement. Either Enforcement 

or Supervision will exclusively consider each finding. 

The Bureau commits to publishing 

ARC data going forward at the 

conclusion of each fiscal year, beginning 

with the data for fiscal year 2017 in the 

next edition of Supervisory 

4.2 Fair Lending Developments 

4.2.1 HMDA Data Collection and 

Reporting Reminders for 2017 

As reported in previous editions of 

Supervisory Highlights, beginning with 

Home Mortgage Disclosure Act (HMDA) 

data collected in 2017 and submitted in 

2018, responsibility to receive and 

process HMDA data will transfer from 

the Federal Reserve Board (FRB) to the 

CFPB.53 The HMDA agencies have 

agreed that a covered institution filing 

HMDA data collected in or after 2017 

with the CFPB will be deemed to have 

submitted the HMDA data to the 

appropriate Federal agency.54

The effective date of the change in the 

Federal agency that receives and 

processes the HMDA data does not 

coincide with the effective date for the 

new HMDA data to be collected and 

reported under the Final Rule amending 

Regulation C published in the Federal 

Register on October 28, 2015. The Final 

Rule’s new data requirements will apply 

to data collected beginning on January 

1, 2018. The data fields for data 

collected in 2017 have not changed. 

Additional information about HMDA, 

the HMDA Filing Instructions Guide 

(FIG) and other data submission 

resources are located at: http:// 

www.consumerfinance.gov/dataresearch/hmda/. 

4.2.2 HMDA Data Reviews and the 

Adequacy of HMDA Compliance 

Programs 

As part of its supervision of very large 

banks and nonbank mortgage lenders, 

the CFPB reviews the accuracy of 

HMDA data and the adequacy of HMDA 

compliance programs. In 2013, the 

CFPB issued a bulletin reminding 

mortgage lenders about the importance 

of submitting correct mortgage loan 

data. The CFPB has conducted HMDA 

reviews at dozens of bank and nonbank 

mortgage lenders, and has found that 

many lenders have adequate compliance 

systems and produce HMDA data with 

few errors. Moreover, while some 

lenders have been required to resubmit 

their HMDA data because their errors 

exceeded the relevant resubmission 

thresholds, most of those matters have 

been addressed through a supervisory 

resolution. 

As noted above, the 2015 Final Rule’s 

new data requirements will apply to 

data collected beginning on January 1, 

2018. Given the recent updates to the 

rule, the Bureau’s current principal 

focus is on providing regulatory 

implementation support to financial 

institutions, to assist them in 

operationally implementing the recent 

changes to the HMDA requirements. 

After the rule takes effect, consistent 

with our approach to the 

implementation of other Bureau rules 

requiring significant systems and 

operational changes, our approach will 

generally be diagnostic and corrective, 

not punitive. In our initial examinations 

for compliance with the rule, we intend 

to consider whether companies have 

made good faith efforts to come into 

compliance with the rule in a timely 

manner. Specifically, we will be 

evaluating a company’s overall efforts to 

come into compliance, including 

assessing the compliance management 

system and conducting transaction 

testing. If errors are identified, we will 

work with the institution to determine 

the root cause of the issue and 

determine what corrective actions, if 

any, are necessary. 

4.2.3 FFIEC Releases Updates to 

HMDA Examiner Transaction Testing 

Guidelines 

In August 2017, the FFIEC, of which 

the Bureau is a member agency, released 

the FFIEC HMDA Examiner Transaction 

Testing Guidelines (Guidelines).55 For 

HMDA data collected by financial 

institutions in or after 2018, these new 

FFIEC Guidelines replace the Bureau’s 

HMDA Resubmission Schedule and 

Guidelines which was released in 

October 2013. 

The Guidelines Will Help Ensure 

Accurate Data and Address Reporting 

Burden Concerns 

When examining financial 

institutions, federal supervisory 

agencies may check the accuracy of 

HMDA data within a sample of reported 

transactions. If examiners find that the 

number of errors in the sample exceeds 

certain thresholds, the lender is directed 

to correct and resubmit its HMDA data. 

In light of the new data fields that will 

be required beginning in 2018, the new 

Guidelines: 

D Eliminate the file error 

resubmission threshold under which a 

financial institution would be directed 

to correct and resubmit its entire Loan 

Application Register (LAR) if the total 

number of sample files with one or more 

errors equaled or exceeded a certain 

threshold. 

D Establish, for the purpose of 

counting errors toward the field error 

resubmission threshold, allowable 

tolerances for certain data fields. 

D Provide a more lenient 10 percent 

field error resubmission threshold for 

financial institutions with LAR counts 

of 100 or less, many of which are 

community banks and credit unions. 


rmajette on DSKBCKNHB2PROD with NOTICES
48714 Federal Register / Vol. 82, No. 201 / Thursday, October 19, 2017 / Notices 

56See the related Request for Information, 

available at http://files.consumerfinance.gov/f/ 

201601_cfpb_request-for-information-regardinghome-mortgage-disclosure-act-resubmission.pdf. 

57See Compliance Bulletin 2017–01, available at 

https://www.consumerfinance.gov/policycompliance/guidance/implementation-guidance/ 

bulletin-phone-pay-fees/. 

At the same time, the Guidelines 

ensure HMDA data integrity by 

maintaining field error resubmission 

thresholds that safeguard the accuracy 

of each data field, and thus all data, 

reported under HMDA. Furthermore, 

under the Guidelines, examiners may 

direct financial institutions to change 

their policies, procedures, audit 

processes, or other aspects of its 

compliance management system to 

prevent the reoccurrence of errors. 

All Federal HMDA Supervisory 

Agencies Will Use the Same Guidelines 

The Guidelines represent a joint effort 

by the Bureau, the FRB, the OCC, the 

FDIC, and the NCUA to provide—for the 

first time—uniform guidelines across all 

Federal HMDA supervisory agencies. 

This collaboration began with the 

Bureau issuing a Request for 

Information 56 and holding outreach 

meetings in which the other supervisory 

agencies participated. The agencies then 

worked together to develop the 

Guidelines. 

Information about HMDA and other 

data submission resources are located at 

http://www.consumerfinance.gov/adataresearch/hmda/. 

4.3 Examination Procedures 

4.3.1 Updates to the Compliance 

Management Review Examination 

Procedures 

On August 30, 2017, the CFPB 

released revised Compliance 

Management Review examination 

procedures. The procedures were 

updated in order to reflect changes to 

the FFIEC Interagency Consumer 

Compliance Ratings System (CC Ratings 

System), which became effective March 

31, 2017. These procedures do not 

reflect any new or additional 

expectations of institutions regarding 

their CMS, nor do they change the 

examiner’s assessment from that which 

examiners have been conducting in the 

past: They only reorganize the 

procedures to align with the CC Ratings 

System and formalize current CMS 

review processes. 

As revised, the CMS examination 

procedures are divided into five 

Modules: 

D Module 1: Board and Management 

Oversight 

D Module 2: Compliance Program 

D Module 3: Service Provider Oversight 

D Module 4: Violations of Law and 

Consumer Harm 

D Module 5: Examiner Conclusions and 

Wrap-Up 

In general, all CFPB reviews will 

include Modules 1, 2, 3, and 5. Module 

4 will generally be included in targeted 

reviews of individual product lines, as 

well as examinations that will result in 

the institution receiving a consumer 

compliance rating. The CMS review for 

target reviews will generally be limited 

to reviewing aspects of CMS pertaining 

to the product line under review. To the 

extent that CMS for a particular product 

line or a specific institution has been 

previously reviewed, CFPB examiners 

may evaluate CMS by reviewing 

previous conclusions and assessing only 

the changes to the current CMS 

program. 

4.4 Recent CFPB Guidance 

The CFPB is committed to providing 

guidance on its supervisory priorities to 

industry and members of the public. 

4.4.1 Phone Pay Fees Bulletin 

On July 31, 2017, the Bureau released 

Bulletin 2017–01,57 which provides 

guidance to covered persons and service 

providers regarding fee assessments for 

pay-by-phone services. The bulletin 

provides examples of conduct observed 

during supervisory examinations and 

enforcement investigations that may 

violate the Dodd-Frank Act prohibition 

on engaging in UDAAPs, as well as the 

FDCPA. The bulletin clarifies that the 

Bureau is not mandating specific payby-phone disclosure requirements, but 

states that the Bureau expects 

supervised entities to review their 

practices on charging phone pay fees for 

potential risks of violating Federal 

consumer financial laws. To that end, 

the bulletin offers a number of 

suggestions for entities assessing 

whether their practices violate these 

laws and further recommends having in 

place a corrective action program to 

address any violations identified and 

reimburse consumers when appropriate. 

5. Conclusion 

The Bureau recognizes the value of 

communicating its program findings to 

CFPB-supervised entities to help them 

comply with Federal consumer financial 

law, and to other stakeholders to foster 

a better understanding of the CFPB’s 

work. 

To this end, the Bureau remains 

committed to publishing its Supervisory 

Highlights report periodically to share 

information about general supervisory 

and examination findings (without 

identifying specific institutions, except 

in the case of public enforcement 

actions), to communicate operational 

changes to the program, and to provide 

a convenient and easily accessible 

resource for information on the Bureau’s 

guidance documents. 

Dated: September 7, 2017. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2017–22700 Filed 10–18–17; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF DEFENSE 

Office of the Secretary 

[Docket ID: DOD–2017–OS–0057] 

Notice of Availability of an 

Environmental Assessment 

Addressing Defense Logistics Agency 

Construction and Operation of a 

Disposition Services Complex at DLA 

Disposition Services Red River, Texas 

AGENCY: Defense Logistics Agency 

(DLA), Department of Defense (DoD). 

ACTION: Notice of availability (NOA). 

SUMMARY: DLA announces the 

availability of an Environmental 

Assessment (EA) documenting the 

potential environmental effects 

associated with the Proposed Action to 

construct and operate a DLA Disposition 

Services Complex at DLA Disposition 

Services Red River, Texas, which is on 

the Red River Army Depot. The EA has 

been prepared as required under the 

National Environmental Policy Act 

(NEPA). 

DATES: The public comment period will 

end on November 20, 2017. 

ADDRESSES: You may submit comments, 

identified by DOD–2017–OS–0057, to 

one of the following: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Department of Defense, Office 

of the Deputy Chief Management 

Officer, Directorate for Oversight and 

Compliance, Regulatory and Advisory 

Committee Division, 4800 Mark Center 

Drive, Mailbox #24, Suite 08D09B, 

Alexandria, VA 22350–1700. 

FOR FURTHER INFORMATION CONTACT: Ira 

Silverberg at 703–767–0705 during 

normal business hours Monday through 

Friday, from 8:00 a.m. to 4:30 p.m. 

(EDT) or by email: ira.silverberg@

dla.mil. 

SUPPLEMENTARY INFORMATION: The EA 

complies with 32 Code of Federal 


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