SAN DIEGO — The Consumer Financial Protection Bureau is questioning lenders about potential fraudulent data in accounts slated for repossession, Calvin Hagins, the agency’s deputy assistant director for originations, said while making comparisons to Wells Fargo & Co.‘s fake checking accounts settlement.
“We can look at other markets where folks put numbers on applications that weren’t exactly true — they were either incentivized to meet sales quotas, or they just wanted to do it, I guess,” he said during the Regulators’ Roundtable at the 2017 Auto Finance Risk & Compliance Summit last week. “You look at foreclosures, you figure at the end of the day, foreclosures happen, but then it was later revealed that there was fraudulent information on the application. Perhaps the same thing could apply to repossessions.”
The bureau isn’t concluding anything about these inquiries, Hagins was quick to note, but is asking these questions of lenders, he added.
Until new legislation is passed that could alter the structure of the CFPB, “it’s business as usual — until something happens,” including holding lenders responsible for any fraudulent applications coming from dealers, he said.
“If you’re buying paper from someone, don’t you want to make sure there are proper controls in place, so that there isn’t fraud in the document?” he asked attendees. “Is that not a reasonable expectation? The question is, ‘How do you ensure for that? How do you test for that?’”
