TILA consumer compliance violations topped the list in 2020, report finds

Violations of truth in lending rules were at the top of the top five violations of consumer protection laws in 2020 among banks, the federal insurer of bank deposits said Wednesday in releasing its annual consumer compliance supervisory highlights.

In its report, the Federal Deposit Insurance Corp. (FDIC) said the violations of the Truth in Lending Act (TILA) regulations totaled eight “level 3 violations,” the highest stage of rule infractions, which the agency describes as those that “represent the greatest potential for consumer harm.”

The details are contained in the agency’s 2020 Consumer Compliance Supervisory Highlights.

The other top four violations of consumer protection laws involved: Flood Disaster Protection Act (FDPA), with five level 3 violations; Truth in Savings Act (TISA), three; Electronic Funds Transfer Act (EFTA), three; and the Real Estate Settlement Procedures Act (RESPA), one.

For total violations (levels 3, 2 and 1), the agency reported a slight change, with TISA infractions moving up a notch: TILA, 563 (40% of total violations); TISA, 143 (10%); FDPA, 133 (9%); EFTA, 126 (9%); and RESPA, 73 (5%).

Overall, the agency said the top five areas represent a center of focus for consumer compliance examiners.

Additionally, the FDIC reported, last year it initiated eight formal enforcement actions and 16 informal enforcement actions to address consumer compliance examination findings. Civil money penalty (CMP) orders totaling $63,466 against institutions to address violations of the FDPA were also issued last year, the agency said. Voluntary payments to consumers totaled approximately $7.4 million to more than 67,000 consumers, the FDIC reported.

The report also includes, the FDIC said, a summary of the agency’s supervisory approach in response to the coronavirus crisis, supervisory observations related to consumer protection laws, examples of practices that may be useful in mitigating risks, regulatory developments, and consumer compliance resources. The publication, the agency said, helps support efforts to manage consumer compliance responsibilities and stay abreast of regulatory topics.

FDIC 2020 Consumer Compliance Supervisory Highlights.