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Consumer Financial Protection Bureau (CFPB)
CFPB Sues USASF Servicing for Illegally Disabling Vehicles and for Improper Double-Billing
Practices
The CFPB filed a lawsuit against auto-loan servicer USASF Servicing (USASF) alleging that USASF performed practices which harmed individuals with auto loans. These practices include wrongfully disabling borrowers’ vehicles, improperly repossessing vehicles, double-billing borrowers for insurance premiums, and failing to return millions of dollars in refunds to consumers. The CFPB is seeking to obtain redress for consumers and civil money penalties and stop any future violations.
The CFPB alleges that USASF:
Illegally disabled cars: Many auto lenders require that cars are installed with devices using GPS technology that allow the lender or servicer to prevent a borrower from starting a car. These devices are known as “kill switches” or “starter interrupters.” USASF incorrectly disabled vehicles at least 7,500 times and caused these devices to play warning tones in vehicles over 71,000 times during periods when the consumer was not in default or was in communication with USASF about upcoming payments. USASF remotely disabled vehicles at least 1,500 times after
explicitly promising consumers it would not do so.
Failed to refund premiums to consumers: USASF offered consumers Guaranteed Asset Protection, which covers some of the difference (or gap) between the amount a borrower owes on their auto loan and what the car insurance will pay if the vehicle is stolen, damaged, or totaled. When consumers paid off their loans early or USASF repossessed a car and charged off an account, consumers were entitled to refunds of any Guaranteed Asset Protection premiums paid in advance for periods where they would no longer have coverage. USASF failed to obtain millions of dollars in
refunds from the Guaranteed Asset Protection administrator.
Double-billed consumers and misapplied payments: When consumers were enrolled in collateral-protection coverage by a USASF affiliate, they were also charged for that same coverage by USASF. Approximately 34,000 consumers were double-charged for the insurance each billing cycle, in some cases for over a year, costing consumers millions of dollars. USASF also wrongfully applied consumers’ extra loan payments first to late fees or collateral-protection insurance instead of accrued interest. This misapplication of payments caused consumers to pay over a million
dollars in interest and fees that they would not have paid if USASF had correctly applied their payments.
Wrongfully repossessed vehicles: USASF illegally repossessed the vehicles of some consumers who never qualified for repossession or had taken action to stop the repossession. In some instances, USASF sold the vehicles that it had wrongfully repossessed.
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Federal Financial Institutions Examination Council (FFIEC)
FFIEC Announcement 2023-02
The Federal Financial Institutions Examination Council, on behalf of its members, released updates to the following sections of the Bank Secrecy Act/Anti-Money
Laundering Examination Manual.
The updates should not be interpreted as new instructions or increased focus on certain areas; instead, they offer further transparency into the examination process and support risk-focused examination work.
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BSA Officer Training Coming Up Sept. 13
We wanted you to be the first to know about GoWest’s upcoming BSA Officer Training presented by Aux. If you or any of your team members are responsible for BSA at your credit union, this is a program you will not want to miss.
Bank Secrecy Act/Anti-Money Laundering Rules Update
Overview of BSA and other Anti-Money Laundering Rules
CTRs and SARs – a refresher
OFAC Update
Examiner expectations
BSA/AML Training requirements and ideas to make BSA training more fun for your staff
BSA/AML Best Practices
Wednesday, September 13 | 9:00 a.m. to 4 p.m. MT (8 a.m. to 3 p.m. PT)
In-Person: $250
Virtual: $200
Click here to register!
Breakfast and Lunch will be provided to all in-person attendees
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League InfoSight Highlight: Artificial Intelligence Usage Policy
I was at a meeting last week where three photographs were shown. We were asked to pick out the one that was created by artificial intelligence. We couldn’t! It was fascinating and scary at the same time! What’s real and what isn’t?
Credit unions are going through a similar exercise in trying to determine how they can stay ahead of the game with artificial intelligence (AI). What’s real? What are the risks? How can we use AI in a safe way to build more efficiency and serve our members more effectively.
While we certainly don’t have all the answers, we have worked with a few credit unions to develop an Artificial Intelligence Usage Policy (4500) for CU PolicyPro. As credit unions further investigate their future with AI, they need to outline basic concepts for themselves. For example:
Who is responsible for overseeing the proper use of AI?
What are some of the risk management and controls that need to be in place?
What are some of the acceptable and prohibited uses of AI?
Should there be mandatory training for staff?
Who has responsibility for third-party vendor management review and testing?
Who will audit the program and how will they audit?
This policy will continue to evolve, just like AI technology and how credit unions use AI. In the meantime, our goal is to provide credit unions with a framework to start a healthy dialogue, make informed decisions and ultimately find a way to use AI in a way that safely aligns with the credit union’s strategic priorities!
Have any thoughts or want to share how your credit union is using AI, please email us at info@leagueinfosight.com. We would love to hear from you!
Glory LeDu
CEO, League InfoSight and CU Risk Intelligence
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ARTICLES OF INTEREST |
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2022 SAR Filing Trend Date Now Available on FinCEN’s Website
FinCEN Officials Travel to Mexico for Meetings with Mexican Counterpart on Illicit Finance Trends Associated with Fentanyl and
Other Threats
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Q&A OF THE WEEK |
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We have a member who is both hearing and sight impaired. They are telling us that under the ADA laws, financial institutions are required to have TTY lines. Is this correct?
Yes and no.
The ADA requirements for auxiliary aids and services require credit unions as a public accommodation to take necessary steps to ensure that no member with a disability is excluded, denied services, segregated or otherwise treated differently from other individuals because of the absence of auxiliary aids.
A TTY is an example of an auxiliary aid.
The regulation further states that when a public accommodation uses an automated-attendant system, including, but not limited to, voicemail and messaging, or an interactive voice response system, for receiving and directing incoming telephone calls, that system must provide effective real-time communication with individuals using auxiliary aids and services, including text telephones (TTYs) and all forms of FCC-approved telecommunications relay systems, including Internet-based relay systems.
This is the yes.
As for the no:
(d)(5) This part does not require a public accommodation to use a TTY for receiving or making telephone calls incident to its operations.
You are required to treat a relay service call as if it came directly from the member.
28 CFR 36.303
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If you have questions about this communication, contact us at 800.546.4465, or via our shared email inbox at compliance@gowest.org.
Have a great week!
Your GoWest Compliance Team,
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David Curtis
CUCE
Director, Compliance Services
P: 206.340.4785
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Copyright © 2023 GoWest Credit Union Association. All Rights Reserved.
Mailing Address:
GoWest Credit Union Association, 18000 International Blvd, Ste. 1102, SeaTac, WA 98188, United States
1.800.995.9064
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