The CFPB has filed a lawsuit in a Georgia federal district court against USASF Servicing (USASF) in which the CFPB alleges that USASF engaged in various unfair acts or practices in violation of the Consumer Financial Protection Act.  USASF services retail installment sales contracts (RICs) originated by its affiliate, U.S. Auto Sales, Inc., which the CFPB describes as a “buy-here, pay-here car dealer.”

The complaint alleges that USASF engaged in the following unfair acts or practices:

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• Wrongful activation of starter-interruption devices. USASF’s internal procedures regarding starter-interruption devices (SID) installed in vehicles serviced by USASF provided that USASF would activate warning tones on a SID for the first four days following a missed payment and would disable the vehicle once a consumer was five days past due.  The procedures also provided that USASF would not activate a SID if the consumer had made a promise to make a payment on his or her loan.  USASF admitted to the CFPB that, due to programming errors, system errors, and human errors, it had (1) disabled vehicles at least 5,200 times when the consumer was not in default or made a promise to pay, (2) disabled vehicles at least 1,500 times after explicitly promising consumers it would not do so, and (3) sent warning tones over 71,000 times to consumers who had made a payment or were not in default, with the warning tones persisting for four days or more for many consumers.

• Failure to refund unearned GAP premiums. In connection with repossessed vehicles and charged-off accounts, USASF failed to submit a request for a refund of unearned guaranteed asset protection (GAP) premiums, resulting in over $1 million in refunds that were not obtained and applied to consumer’s deficiency balances.  In connection with early pay-offs, the payoff amount requested by USASF included GAP premiums for the full loan term.  When a third party paid off a consumer’s loan early, USASF would submit a refund claim to the GAP administrator, using the payoff date as the date of GAP cancellation.  When a consumer paid off a loan early, USASF would not submit a refund claim to the GAP administrator unless the consumer specifically requested a refund of unearned GAP premiums.  In this situation, USASF used the date of the refund request rather than the payoff date as the date of GAP cancellation.  USASF failed to provide refunds of GAP premiums and unearned interest totaling at least $4 million for consumers who paid off their loans early and even when a refund was provided, it was inaccurately small because USASF did not request the refund as of the payoff date and did not refund interest on the unearned premiums.

• Double billing for CPI.  From December 2105 through August 2021, USASF billed consumers twice per billing cycle for collateral protection insurance (CPI).  From 2015 to 2019, it often took more than 60 days for USASF to correct a double-billing error.  From 2019 to 2021, when USASF was using a different servicing system, it took USASF an average of over 120 days to correct a double-billing error.  In over 5,800 instances, USASF failed to correct such errors.

• Misapplication of payments. The RICs serviced by USASF required it to apply the portion of any payment that exceeded the regularly scheduled payment amount first to accrued interest.  USASF admitted to the Bureau that it misapplied extra payment amounts first to late fees or CPI fees instead of accrued interest at least 8,738 times over nearly five years. 

• Wrongful repossession.  USASF does not notify consumers of a planned repossession unless state law requires a right-to-cure notice.  USASF uses repossession forwarders that direct local recovery agents to repossess vehicles on USASF’s behalf.  Its communications with repossession agents are limited to notices though a software platform, including putting holds on repossessions that were initially ordered by USASF.  Prior to 2020, USASF did not have a formal process for servicing supervisors to be notified when activity occurred on an account that would trigger a repossession hold, such as a consumer making a payment or a promise to pay, or filing for bankruptcy.  Prior to December 2021, USASF did not have a process to automatically send a hold request to its repossession forwarder when such activity on an account occurred.  USASF admitted to the CFPB that it wrongfully repossessed vehicles 82 times, including repossessing four vehicles where the consumers were on active military duty and the Servicemembers Civil Relief Act prohibited repossession without a court order.

Many of the allegations in the complaint were previously discussed by the CFPB, without naming USASF, as examination findings in the Fall 2022 Supervisory Highlights.  The relief sought by the CFPB in the complaint includes a permanent injunction enjoining USASF from committing future CFPA violations, consumer redress, and a civil money penalty.

On July 26, 2023 the Consumer Financial Protection Bureau (CFPB or Bureau) released the summer edition of its Supervisory Highlights report, providing a high-level overview of alleged unfair, deceptive, or abusive acts or practices (UDAAP) identified by the agency during examinations from July 1, 2022 to March 31, 2023. The findings included in the report cover examinations in the areas of auto origination, auto servicing, consumer reporting, debt collection, deposits, fair lending, information technology, mortgage origination, mortgage servicing, payday and small dollar lending, and remittances.

In the report and accompanying press release, the CFPB promotes the purported benefits of being supervised by the agency. The CFPB also announces that several nonbanks have voluntarily consented to the CFPB’s supervisory authority, while citing its April 25, 2022 warning that it would use its “dormant authority” to examine nonbanks who “pose risks to consumers.” This signals that the CFPB will leverage its dormant supervisory authority (discussed here) to pressure companies into “voluntarily” consenting to be supervised because, if the company does not consent, the CFPB will publish its finding that the company poses risks to consumers as part of the process of imposing its supervisory authority.

For the most part, the UDAAP examples in this edition of Supervisory Highlights fall into well-understood issues that the Bureau has commented on in the past. But the finding related to powerbooking in the indirect auto industry — addressed in the first bullet of the list below — is brand-new and represents the CFPB’s effort to impose an unprecedented (and in our view, not well supported) duty on auto finance companies to make adjustments to a principal balance based on the existence of a misrepresentation made by the dealer to the lender about the vehicle. The Bureau last did this in 2016 by announcing in Supervisory Highlights that auto finance companies should prohibit repossession agents from charging personal property storage and retrieval fees, and the Bureau followed that announcement with both supervisory activity and a consent order in 2020 on the same subject. This is a statement that the auto finance industry should pay close attention to.

Below is a list of what the CFPB considered the most significant compliance issues identified by examiners during their supervisory activities:

Auto Lending/Servicing:

• Examiners found that some dealers fraudulently documented options that were not actually present on the vehicle — sometimes called “powerbooking”. In the instances where these discrepancies were identified, servicers did not reduce the amount the consumers owed on the loan.

(Authors note: This strikes us as a major, brand-new expectation from the CFPB related to powerbooking that has little legal basis and which could be very significant for auto finance companies.)

• Examiners found that some institutions engaged in deceptive marketing when they used advertisements that pictured cars that were significantly larger, more expensive, and newer than the advertised loan offers related to.

• Examiners found that some servicers engaged in unfair acts or practices by suspending recurring automated clearing house (ACH) payments prior to consumers’ final payment without notifying the consumers that the final payment must be made manually, resulting in missed payments and late fees.

• Examiners found some servicers engaged in blanket cross-collateralization by accelerating and requiring payments from consumers on unrelated debts, such as credit cards, before consumers could reclaim their repossessed vehicles.

Debt Collection:

• Examiners found that some debt collectors continued collection attempts for work-related medical debt after receiving information that the debt was uncollectible under state worker’s compensation law.

• Examiners found some debt collectors advised consumers that if they paid the balance in full by a certain date any interest assessed on the debt would be reversed, but then failed to credit the consumers’ accounts for the accrued additional interest.

Payday Lending:

• Examiners found that some payday lenders engaged in abusive and deceptive acts or practices by including language in loan agreements purporting to prohibit consumers from revoking their consent for the lender to call, text, or e-mail them.

• Examiners found that some institutions made false collection threats related to litigation, garnishment, and late fees.

• Examiners found that, with respect to consumers who signed voluntary wage deduction agreements, certain lenders sent demand notices to their employers incorrectly conveying that the employer was required to remit the full amount of the consumer’s loan balance when, in fact, the consumer had agreed to permit the lenders only to seek a wage deduction in the amount of the individual scheduled payment due.

• Examiners found that some installment lenders failed to confirm that several thousand borrowers were not covered borrowers under the Military Lending Act (MLA), and thus originated loans at rates and terms impermissible under the MLA.

• Examiners found that some lenders misrepresented to borrowers the impact that payment or nonpayment of debts in collection may have on the borrower’s credit reports.

(Authors note: This finding hearkens back to Bulletin 2013-08, where the Bureau asserted that such statements would be viewed as UDAAP violations.)

Fair Lending:

• Examiners found that some mortgage lenders violated the Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, by discriminating in granting pricing exceptions across a range of ECOA-protected characteristics, including race, national origin, sex, or age.

• The CFPB reviewed lending restrictions in underwriting policies and procedures at several lenders to evaluate fair lending risks and to assess compliance with ECOA and Regulation B specifically relating to how those lenders handled the treatment of applicants’ criminal records and whether the lenders properly treated income derived from public assistance.

• Examiners found that criminal records prompted enhanced or second-level underwriting review, but policies and procedures at several institutions did not provide sufficient detail regarding how that review should be conducted, creating fair lending risk around the use of discretion.

• Examiners also identified lenders whose underwriting policies and procedures improperly excluded income derived from certain public assistance programs or imposed stricter standards on income derived from public assistance programs.

Mortgage Servicing:

• Examiners found that some servicers violated Regulation X by failing to evaluate loss mitigation applications within 30 days of receipt. Relatedly, some examiners found that servicers engaged in deceptive acts or practices when they informed consumers that they would evaluate their complete loss mitigation applications within 30 days, but then moved toward foreclosure without completing the evaluations.

• Examiners found that some servicers violated Regulation X by failing to include required loss mitigation language on Spanish language application acknowledgment notices.

• Examiners found that some servicers treated payments received by the transferor servicer during the 60-day period, but not transmitted by the transferor to the transferee until after the 60-day period, as late in violation of Regulation X. Relatedly, examiners found that some servicers violated Regulation X when they failed to maintain policies and procedures reasonably designed to achieve the objective of facilitating transfer of information during servicing transfers.

Information Technology:

• Examiners found that some institutions engaged in unfair acts or practices by failing to implement adequate information technology security controls that could have prevented or mitigated cyberattacks. Specifically, according to the CFPB, the institutions’ password management policies for certain online accounts were weak, the entities failed to establish adequate controls in connection with log-in attempts, and the entities did not adequately implement multi-factor authentication or a reasonable equivalent for consumer accounts.

ROCHESTER, N.Y. — Continental Service Group, LLC, d/b/a ConServe, is a devoted community partner that strives to make the world a better place.  Through the organization’s ongoing philanthropy program, ConServe Cares, the ConServe team supports and funds the efforts of numerous local non-profit agencies that make a difference in our communities.  As a result of the employees’ compassion and generosity, countless lives have been touched and enriched.

In the month of July, the ConServe team, along with their organization’s corporate “Matching Gift Program”, donated to ConnectLife.  George Huyler, Vice President of Human Resources at ConServe said, “ConnectLife’s crucial role in educating and inspiring blood donations within our communities cannot be overstated. We are immensely proud and grateful for our employees’ generosity through the ConServe Cares program, which embodies ConServe’s mission to ‘improve the human condition.’  By contributing to organizations like ConnectLife, our team members can take pride in knowing that they are helping to save lives and make our communities better places.”

Sarah R. Diina, Senior Director Marketing & Community Development said, “We are so grateful to have ConServe as a partner in saving lives, and we are so appreciative for their generous donation. Thanks to their support, ConnectLife will be able to continue to further our education and awareness efforts across the community, and ultimately save more lives.”

About ConServe 

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients.  Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands.  For over 37 years ConServe has collaborated with Clients to achieve their accounts receivable management goals while providing unmatched customer service.  Visit us online at: www.conserve-arm.com 

About ConnectLife  

ConnectLife helps people help others. As a federally designated not-for-profit organ procurement organization and community blood bank, we save and enhance lives through organ, eye, tissue and blood donations.  Visit them online at:  www.ConnectLife.org

Oregon Gov. Tina Kotek has signed into law Senate Bill 619, making Oregon the 11th state to enact a comprehensive consumer data privacy law, following California, Virginia, Colorado, Utah, Connecticut,  Iowa, Indiana, Tennessee, Montana, and Texas. The Act will go into effect July 1, 2024.

Applicability

The Act applies to any person that conducts business in Oregon, or that provides products or services to its residents, and that during a calendar year, controls or processes:

• The personal data of 100,000 or more consumers, other than personal data controlled or processed solely for the purpose of completing a payment transaction; or

• The personal data of 25,000 or more consumers, while deriving 25% or more of the person’s annual gross revenue from selling personal data.

Exemptions

Exemptions include, but are not limited to:

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1. Information collected, processed, or disclosed under and in accordance with the Gramm-Leach-Bliley Act;

2. Information that originates from, or is intermingled so as to be indistinguishable from, information described in paragraph (k)(A) [Gramm-Leach-Bliley Act] of this subsection and that a licensee, as defined in Or. Rev. Stat. Ann. § 725.010, collects, processes, uses or maintains in the same manner as is required under the laws and regulations specified in paragraph (k)(A) [Gramm-Leach-Bliley Act] of this subsection;

3. Financial Institutions as defined in Or. Rev. Stat. Ann. § 706.008, or a financial institution’s affiliate or subsidiary that is only and directly engaged in financial activities, as described in 12 U.S.C. 1843(k);

4. Activities regulated by the Fair Credit Reporting Act;

5. Protected health information under the Health Insurance Portability and Accountability Act.

Or. Rev. Stat. Ann. § 725.010 (Oregon Consumer Finance Act) defines a “licensee” as a person licensed to make consumer finance loans of $50,000 or less.

Or. Rev. Stat. Ann. § 706.008(9) (Oregon Bank Act) defines a “financial institution” as “an [FDIC] insured institution, an extranational institution, a credit union as defined in ORS 723.006, an out-of-state credit union under ORS 723.042 or a federal credit union.”

Consumer Rights

Consumers have the right to:

• confirm processing of their personal data and access such data;
• correct inaccuracies;
• delete personal data;
• obtain personal data provided by the consumer in a portable and readily usable format, if stored digitally;
• opt out of processing if for the purpose of targeted advertising, sale, or profiling.

Sensitive Personal Information

Sensitive personal data may not be processed without the consumer’s consent or, in the case of a known child, pursuant to the Children’s Online Privacy Protection Act.

Sensitive data means personal data that:

1. Reveals a consumer’s racial or ethnic background, national origin, religious beliefs, mental or physical condition or diagnosis, sexual orientation, status as transgender or non-binary, status as a victim of crime or citizenship or immigration status;

2. Is a child’s personal data;

3. Accurately identifies within a radius of 1,750 feet a consumer’s present or past location, or the present or past location of a device that links or is linkable to a consumer by means of technology that includes, but is not limited to, a global positioning system that provides latitude and longitude coordinates; or

4. Is genetic or biometric data.

Contract Requirements

A contract between a controller and processor must be valid and binding and:

1. Set forth clear instructions for processing data, the nature and purpose of the processing, the type of data that is subject to processing and the duration of the processing;

2. Specify the rights and obligations of both parties with respect to the subject matter of the contract;

3. Ensure that each person that processes personal data is subject to a duty of confidentiality with respect to the personal data;

4. Require the processor to delete the personal data or return the personal data to the controller at the controller’s direction or at the end of the provision of services, unless a law requires the processor to retain the personal data;

5. Require the processor to make available to the controller, at the controller’s request, all information the controller needs to verify that the processor has complied with all obligations the processor has under the Act;

6. Require the processor to enter into a subcontract with a person the processor engages to assist with processing personal data on the controller’s behalf and in the subcontract require the subcontractor to meet the processor’s obligations under the processor’s contract with the controller; and

7. Allow the controller, in accordance with an appropriate and accepted control standard, framework or procedure, to assess the processor’s policies and technical and organizational measures for complying with the processor’s obligations, and require the processor to cooperate with the assessment and, at the controller’s request, report the results of the assessment to the controller.

Data Protection Assessments

Controllers must conduct and document a data protection assessment for processing that presents a heightened risk of harm, including:

1. Processing personal data for the purpose of targeted advertising;
2. Processing sensitive data;
3. Selling personal data; and
4. Using the personal data for purposes of profiling.

Enforcement

The Act does not create a private right of action. Provided a person cannot cure a violation within 30 days, the attorney general may seek injunctive relief and a civil penalty of not more than $7,500 for each violation.

Impression

While this Act is similar to other data privacy laws recently enacted, it takes a turn by limiting the GLBA exemption to information and omitting the entity-level exemption that every state has included since California.

For more information and insight from Maurice Wutscher on data privacy and security laws and legislation, click here.

ROCHESTER, N.Y. – August 4, 2023 – Continental Service Group, LLC, d/b/a ConServe is delighted to announce that it has received the esteemed “2023 Best Places to Work in Collections” award from ACA International and Best Companies Group.  This recognition is a testament to ConServe’s excellence in industry programs and is the ninth time that the company has been acknowledged for its outstanding accomplishments in this field.  Best Companies Group conducted the survey program, which administers over 60 local, national, and industry “Best Places” programs each year.

This survey and award program was designed to identify, recognize, and honor the best places of employment in the Collections industry.  This year, 45 companies met the standard to be selected. To be considered for participation, companies had to fulfill the following eligibility requirements:

• Be a for-profit or not-for-profit business or government entity
• Be a publicly or privately held business
• Have a facility in the United States
• Have a minimum of 15 employees in the U.S.
• Must be in business a minimum of 1 year
• Must be a Collection Agency, Collection Law Firm or Debt Buyer.

Companies from across the U.S. entered the rigorous two-part survey process to determine the Best Places to Work in Collections. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems, and demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.

“We are humbled to receive recognition from the Best Companies Group,” commented Rich Klein, President.  This acknowledgement from the industry highlights the dedication of our team members who truly believe that we are doing the right thing, at the right time, and in the right way.  Our employees are the ones who complete the surveys, making this award particularly meaningful. At ConServe, we treasure our employees as our most valuable asset, and we are committed to recruiting, hiring, developing, and promoting the very best. We are delighted to be recognized for the ninth time.”

For more information on the Best Places to Work in Collections program, visit:

www.bestplacestoworkcollections.com

About ConServe

ConServe is a top-performing accounts receivable management service provider specializing in customized recovery solutions for their Clients.  Anchored in ethics and compliance, and steadfast in their pursuit of excellence, they are a consumer-centric organization that operates as an extension of their Clients’ valued brands.  For over 37 years ConServe has collaborated with Clients to achieve their accounts receivable management goals while providing unmatched customer service.  Visit us online at: www.conserve-arm.com

Banks and lenders have under-invested in their recovery strategies in the past few years, but  losses increasing to pre-pandemic levels should serve as a wake up call: it’s time to do a refresh of your recovery strategy.

2nd Order Solutions’ recent whitepaper, Recoveries Strategy Refresh, breaks down all of the reasons why now is the best time for lenders to focus on recoveries, and how their investments could pay off big time in the long run.

Here are four major takeaways from their analysis:

1 – Inventory management is critical.  

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Collections & recovery strategies cannot work if there is not a robust inventory management approach. There are a lot of options for recovering past-due debt, and pulling the right lever for the right account is key to seeing increased revenue through an economic downturn. 

2 – A good recovery strategy is diverse. 

No one strategy will work for all past-due accounts. An effective recovery strategy will include at least some mix of the internal collections, first party outsourcing, third party agencies, legal firms, and debt buyers. Coupled with killer inventory management, using the right tool to collect is the key to collecting on past-due debt and higher liquidation rates.

3 – Investing in digital collections will pay dividends.

 According to 2oS, digital-first recoveries are worth a 10-30% increase in recoveries liquidation, depending on the segment. This means investing in a self-service portal which customers can visit after receiving outbound communication about their debt. It will result in two things: more repayments, and lower cost to collect. 

4 – Debt settlement companies can be your friend. 

The relationship between collections & recovery departments and DSCs has been historically antagonistic. But engaging with DSCs can bring a ton of value for issuers. In fact, working with DSCs proactively often means your past-due debts get prioritized, which is a huge win in a downturn.

Read a full breakdown of how to refresh your recovery strategy here.

Every Thursday, Collections & Recovery sends out an exclusive email packed with analysis on the newest trends in collections strategy, the shift to digital collections, best practices for vendor management, and deep-dives into regulatory and compliance issues that matter to you. The only way to get it is to subcribe.

NEW YORK, NY — Skit.ai, the leading conversational voice AI solution provider in the Account Receivable Management (ARM) industry in the U.S., announced its partnership with Southern Credit Adjusters, Inc., a seasoned North Carolina-based debt recovery agency. The partnership aims to enhance the Southern Credit Adjusters’ debt collection process by optimizing and accelerating revenue recovery efforts.

Southern Credit Adjusters will leverage Skit.ai’s augmented voice intelligence platform to increase their consumer outreach and effectively engage with more extensive account portfolios. The deployment will enable them to tackle critical operational challenges such as account penetration, establishing right-party contacts (RPC), and converting voice interactions with consumers into payments. 

Skit.ai’s conversational voice AI solution for the ARM industry automates end-to-end call operations and empowers consumers with a top-tier self-service option while fully complying with local laws and regulations. This automation enables agents to focus on more complex tasks, such as negotiating payment plans, resolving disputes, and following up on disposition results.

“AI is at our doorstep. Like email and text, the technology can be adapted to the third-party collection space with carefully thought-out scripting and user-friendly application. This technology will become second nature as the consumer becomes more comfortable interacting with conversational voice AI,” said John A Turnage, President of Southern Credit Adjusters. 

He further added “We expect our collaboration with Skit.ai will boost our agency’s capabilities, by incorporating the augmented voice intelligence platform into our existing technology infrastructure. We foresee an enhancement in our outreach, augmented agent productivity, improved RPC rates, and, most importantly, a deeper portfolio penetration to boost revenue recovery for our clients.”

This partnership highlights the growing, widespread integration of cutting-edge technologies, such as conversational voice AI, in the ARM industry, which enables agencies to tackle agent-centric challenges, enhance collection strategies, address concerns like agent scarcity and rising operational costs. Additionally, it establishes a strong foundation for sustainable growth in a dynamic market for industry leaders like Southern Credit Adjusters.

Commenting on the partnership’s success, Sourabh Gupta, Founder and CEO of Skit.ai, stated: “Early adopters of our solution have witnessed 100% account penetration in hours; Southern Credit Adjusters will be able to experience similar value while enabling human agents to improve RPC rates and boost revenue recovery for their clientele.”

Schedule a meeting to learn more about how Skit.ai can help you accelerate revenue recovery with higher efficiency and at an infinite scale.

About Southern Credit Adjusters: 

Southern Credit Adjusters, Inc., headquartered in Rocky Mount, NC, has provided quality collection programs for many businesses since 1981. From billing to collections – their services have increased profitability for our clients by reducing their accounts receivable. Southern Credit Adjusters currently serve a wide variety of businesses, from manufacturers, IT & software, property management, professional services, distributors, telecommunications, contractors, country and yacht clubs. Visit https://southerncreditadj.com

About Skit.ai: 

Skit.ai is the ARM industry’s leading conversational Voice AI company, enabling collection agencies to streamline and accelerate revenue recovery. Skit.ai’s compliant, configurable, and easy-to-deploy solution enables enterprises to automate nearly one million weekly consumer conversations. Skit.ai has been awarded several awards and recognitions, including Disruptive Technology of the Year 2022 by CCW, Stevie Bronze Winner 2022 by The International Business Awards, and Gold Globee CEO Awards 2022. Skit.ai is headquartered in New York City, NY.  https://skit.ai/

On July 20, the CFPB released an Issue Spotlight covering findings from an inquiry into worker experiences with employer-driven debt. In June 2022, the Bureau launched a formal inquiry on practices and financial products that may cause an employee to owe a debt to their employer. (Covered by InfoBytes here.) The inquiry focused on debt obligations incurred by consumers in the context of an employment or independent contractor arrangement, including training repayment agreements where employees are required to repay the costs of job training should they voluntarily or involuntarily leave a job within a set time period. 

The inquiry sought information on “prevalence, pricing and other terms of the obligations, disclosures, dispute resolution, and the servicing and collection of these debts,” and asked consumers whether they felt they “have a meaningful choice” in agreeing to these products, what these agreements’ terms and conditions are, and whether the products might prevent individuals from seeking alternative employment.

The recent Issue Spotlight found that employer-driven debt presents several risks to consumers, including:

• Workers experience unique harms related to employer-driven debts, as these debts are tied to their employment, and the issuer of the debt controls their ability to repay it.

• Employees may be rushed into signing agreements that conceal debt details or employers may change terms and conditions after origination without a worker’s knowledge.

• Workers’ focus on securing or advancing employment may lead them to overlook valuation, disclosures, and terms of credit or lease products.

• Employer-driven debts may be imposed as a mandatory precondition of employment, potentially hindering workers’ ability to negotiate terms before accepting a job.

• Employers may misrepresent the value and nature of employer-driven debt, work conditions, and potential job earnings, leading workers to expect career mobility and higher earnings.

• Workers may suffer negative impacts on household financial stability, such as lower earnings, damaged credit scores, and additional debts, to meet repayment-related obligations.

The Bureau stated that it is committed to working with other federal, state, and local regulators to address potential workplace consumer harms and said it intends to evaluate the use of training repayment agreement provisions or other employer-driven debts for potential violations of consumer financial laws.