Is CFPB guilty of spin?
|Jim Henry is a special correspondent for Automotive News.|
Remarks delivered by Consumer Financial Protection Bureau Director Richard Cordray and language used in a bureau statement last week were a lot harsher than the dry legalese of the consent order signed this month by the CFPB and First Investors Financial Services Group Inc.
Bennie Duck, CFO of First Investors Financial Services Group, signed the consent order Aug. 7; Cordray’s signature is dated Aug. 19.
On Aug. 20, the day the consent order was announced, Cordray read prepared remarks during a conference call. “Thank you for joining us,” he began. “Today the Consumer Financial Protection Bureau is taking action against an auto finance company that distorted consumer credit records for years.”
The headline on the bureau’s press release echoes the “d” word: “Consumer Financial Protection Bureau Takes Action Against Auto Finance Company for Distorting Borrower Credit Reports.”
A lot of the later press coverage uses the word “distort,” too. It implies the lender took good data and deliberately misrepresented it.
But the consent order repeatedly uses the term “inaccurately reporting” for what First Investors Financial Services Group did -- or rather what its vendor did -- with customer data. The consent order says First Investors Financial Services Group didn’t do enough to correct a vendor’s mistake, even after the lender became aware there was a problem.
That was “against the law,” Cordray said. And the lender’s action, or inaction, resulted in incorrect information being furnished to credit bureaus, the CFPB said. The net result is that First Investors Financial Services Group is taking the hit for inaccurate data that ended up on some credit reports.
But to say First Investors Financial Services Group “distorted” the data paints a darker picture.
First Investors Financial Services Group wouldn’t comment outside of the written statement it released Aug. 20. The statement said, in part, that the company accepted the settlement “to avoid the expense and business disruption associated with defending any lawsuit.”
Still, it’s troubling how the CFPB characterized the case, compared with the original document. It sounds like a distortion.
You can reach Jim Henry at email@example.com.