Enforcement

Are you a highly-motivated law student looking for an externship this fall? Are you looking for the chance to do exciting work at a fast-paced 21st century agency? Do you have the desire to impact the lives of everyday American families? If so, we have just the opportunity for you!

What will you do?
As a student volunteer with our Enforcement team, you’ll work directly with a seasoned attorney to assist in a variety of projects including legal research and drafting memoranda and pleadings. You’ll directly impact our overall mission through participation in federal or administrative investigation and litigation involving consumer financial laws. Although the externship is unpaid, you will be able to apply classroom lessons to the real world, and build a network of professionals that can mentor you throughout your career.

Who are we looking for?
If you have a relentless commitment to professional and organizational excellence, have a strong academic record, are a strong writer, and can juggle tasks and aptly prioritize in a fast-paced environment, you could be a valuable asset to our enforcement team.

You need to be available at least 15 hours per week between August and December 2013.

Applications are due no later than May 15 at midnight and will be considered on a rolling basis.

And now, for all you law students… the fine print:
This position is unpaid. Student volunteers must be able to obtain academic credit with the permission of the student volunteer’s law school.

To apply for the externship, send a cover letter, resume, list of three references, writing sample, and unofficial law school transcript to:

Student Volunteer Coordinator
Office of Enforcement
Consumer Financial Protection Bureau
enfinterns@cfpb.gov
Please include “Fall 2013 Externship” in your subject line.
Application deadline is May 15th, 2013

One way we further our mission to protect consumers is through appropriately sharing with state and local law enforcement agencies information that CFPB has gathered. Today, we’re announcing a new dimension in our ongoing sharing efforts. The CFPB recently signed a Memorandum of Understanding (MOU) with the Navajo Nation Department of Justice, setting out a framework for coordination and cooperation between our agencies. This is the first time that the CFPB has entered into an MOU with a tribal government.

We are excited about the opportunity to partner in enforcing federal consumer financial laws to protect consumers on the Navajo Nation. This new agreement supports our work to prevent harmful practices that target Native American consumers.

In addition to memorializing our intent to work together to protect tribal consumers, the MOU is designed to further our mutual consumer-protection goals by providing for the protected exchange of law enforcement-related information. The MOU details how the CFPB will respond to, among other things, third party requests for tribal information. Further, the MOU details the mechanism by which the Navajo Nation Department of Justice may request information from the CFPB and, if shared, protections for that information. These protections are also set forth in our federal regulations at 12 C.F.R. 1070.43 and 1070.47. Finally, as an overarching goal, the MOU confirms the confidentiality and non-disclosure of oral and written information that we share with each other.

See the full the Memorandum of Understanding.

Today, a federal district court entered an order that returns money to the pockets of American consumers and stops a company from violating laws. The case also represents a landmark for us: it’s the first time we’ve joined with state attorneys general in filing suit to enforce consumer-financial-protection laws. The order is a win for the company’s customers.

Payday Loan Debt Solution, Inc. (PLDS) is a debt-relief service provider that purports to help consumers settle their payday-loan debts. A Bureau investigation found evidence that PLDS routinely charged consumers a fee in advance of actually settling their debts. This practice violates the Federal Trade Commission’s Telemarketing Sales Rule, the Dodd-Frank Act, and the laws of various states.

We brought this lawsuit to stop PLDS’s unlawful practice and to obtain compensation for consumers who were unlawfully charged advance fees. Upon learning of the Bureau’s investigation, PLDS immediately ceased its unlawful conduct and has cooperated with the Bureau’s investigation. Today, the court enters an order that resolves this matter. The order:

1. Finds that PLDS and its president, Sanjeet Parvani, engaged in practices that violated the federal consumer financial protection laws and the laws of several states;
2. Enjoins PLDS and Parvani from engaging in the unlawful conduct in the future;
3. Requires PLDS to pay $100,000, amounting to full restitution for consumers who were charged advance fees, but who received no debt-settlement services from PLDS by the time their accounts were closed;
4. Requires PLDS to pay to the Bureau $5,000 in a civil money penalty; and
5. Requires PLDS and Parvani to cooperate with the Bureau in any future investigations of other entities related to the transactions that are the subject of the complaint.

This was our first joint enforcement action with state attorneys general. As we sought to enforce federal consumer protection laws, the states of Hawaii, New Mexico, North Carolina, North Dakota, and Wisconsin all joined our investigation and lawsuit to enforce their own laws. Today’s order grants complete injunctive relief to consumers under the laws of these states, as well as restitution to harmed consumers there and elsewhere.

The court order includes instructions to pay a civil monetary penalty. PLDS and Parvani immediately ceased the unlawful conduct and cooperated with our investigation, which helped limit the size of the civil penalty.

This matter affects only a single debt-relief service provider, but it is part of our comprehensive effort to police the debt-relief industry. Our work focuses not only on debt-relief service providers, but also on their partners, including those who facilitate their unlawful conduct and who may also run afoul of the federal consumer financial protection laws.

As a result of today’s order, American Express must repay an estimated $85 million to approximately 250,000 consumers. American Express will return the money directly into the accounts of the affected consumers. If the consumer no longer holds the American Express card, American Express will mail a check or credit any outstanding balance.

• Customers who were promised $300 for signing up for a Blue Sky Credit Card will get the $300.
• Consumers who paid an illegal late fee will be reimbursed, with interest.
• Consumers who paid old debt in response to deceptive promises to report payment to credit bureaus will be reimbursed the money they paid plus interest.
• Consumers who were promised their debt would be forgiven but were denied new American Express cards because the debt was not really forgiven, will receive $100 and a pre-approved offer for a new card with terms we and the FDIC find acceptable. If the consumer already paid the waived or forgiven amount in order to get a new card, they will be refunded that amount plus interest.

Consumers are not required to take any action to receive their credit or check.

If you are one of the consumers affected by the order, American Express will notify you directly. They are responsible for notifying any affected consumers – any other entity that offers to help reclaim your money is likely a scam.

Today, in close partnership with our fellow banking regulators, we are ordering three subsidiaries of the American Express Company to put some $85 million back into the wallets of consumers. The subsidiary companies will modify various credit card practices found to be illegal, make full refunds to approximately 250,000 customers, and pay $14.1 million in fines.

Over the course of a long, multi-agency investigation, we found that at every stage of the consumer experience − from advertising to enrollment to payment to collection – these American Express subsidiaries had violated various consumer financial laws.

The Federal Deposit Insurance Corporation (FDIC), along with the Utah Department of Financial Institutions, uncovered the problems during a routine examination in February 2011. After the Consumer Financial Protection Bureau (CFPB) opened its doors for business five months later, we inherited many of the consumer protection functions of the FDIC, and the case was passed on to us.

Upon further investigation, we learned that the problems were widespread.

Our investigations found that when consumers were shopping for credit cards, one American Express company sent potential customers misleading credit card offerings in the mail. When consumers applied for cards, the same company engaged in practices that unlawfully discriminated on the basis of age. In connection with consumers paying their bills, American Express companies violated consumer financial laws. For example, we found that these American Express companies charged consumers excessive late fees.

And we found that all three American Express subsidiaries − American Express Centurion Bank and American Express Bank, FSB, along with their parent company and affiliate, American Express Travel Related Services Company, Inc. – misled people into paying off old debt by telling them that it would be reported to the credit bureaus and their credit scores would improve. In fact, the debt was not reported to the credit bureaus and in any event it was so old that it may not have appeared in credit reports anyway.

So today, multiple agencies are joining together to require the American Express companies to refund money to consumers, pay fines, and change their practices. This includes not only the CFPB and the FDIC, but also the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency. The State of Utah will also be taking its own related action through its Department of Financial Institutions.

We are ordering the American Express subsidiaries to make a full refund of approximately $85 million to consumers who were harmed. The American Express subsidiaries will identify those consumers, notify them, and make sure they get their money back. The burden will not fall on customers to pursue their refunds. To ensure compliance with all terms of the agreements, the companies will hire independent auditors to verify that the orders are being carried out.

Under the non-monetary terms of the Consent Order with American Express Centurion Bank, the bank is required to stop deceiving consumers by falsely promising a rebate or a points feature on credit cards or any other card. The company will have to ensure that it does not unlawfully discriminate based on age in deciding who qualifies for a credit card. And the bank and American Express Bank, FSB will properly report disputes to credit bureaus and make sure that cardholders are informed of their rights. They will also stop charging consumers the illegal late fees.

The Bureau is also issuing a consumer advisory today. The advisory will inform consumers who were harmed about how they will benefit from this action and how they will receive money, if they are eligible.

We share the same task with these companies themselves: to make sure that every business is following the rules. Consumers expect and deserve that. We will continue to work steadily toward this objective.

The mission of the CFPB is to ensure compliance with federal consumer financial laws through effective enforcement of those laws. When the Office of Enforcement needs to gather information, it may issue a Civil Investigative Demand (CID) to people and institutions that may have materials relevant to an investigation. The law that created the CFPB gives us the authority to gather information this way, and several other federal agencies have similar processes.

We carefully consider what to request in each Civil Investigative Demand. A recipient of a CID may challenge a CID by petitioning the CFPB’s Director. The Director can respond in three ways: he can reaffirm our decision to obtain the information, modify the demand, or set it aside altogether. Director Cordray issued his first ruling on a petition this week. He ordered PHH Corporation, a mortgage lending company, to comply with the Civil Investigative Demand within 21 days.

Although we do not generally comment on confidential law enforcement investigations, we’re committed to telling the public what we can, when we can, about our work to protect consumers. That’s why our rules relating to investigations say that when someone challenges a Civil Investigative Demand and the Director responds, these are generally public records. We will generally post them on our website when we can.