October 05, 2020

Cortez Masto, Brown Lead Letter to Administration for Failure to Provide Restitution to Veteran Victims of Deceptive Marketing Practices

Washington, D.C. – Today, U.S. Senators Catherine Cortez Masto (D-Nev.) and Sherrod Brown (D-Ohio) led 14 of their Senate colleagues in sending a letter to Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger regarding the Bureau’s recent public enforcement actions against mortgage originators offering Veterans Administration (VA)-guaranteed loans. Between July 2020 and September 2020, the CFPB announced consent orders against eight different mortgage lenders for deceptive and misleading advertising of VA mortgages. In each case, the CFPB found that the originators’ advertisements contained false, misleading, or inaccurate statements that violated the Consumer Financial Protection Act’s prohibition against deceptive acts and practices, the Mortgage Acts and Practices Advertising Rule, and Regulation Z. The CFPB collected approximately $2.8 million in civil penalties from these eight violators, but did not require any of these companies to provide restitution to harmed consumers.

The lawmakers wrote, “We write to you regarding the Consumer Financial Protection Bureau (Bureau)’s recent public enforcement actions against mortgage originators offering Veterans Administration (VA)-guaranteed loans. We are deeply concerned by the Bureau’s failure to obtain restitution for consumers who were targeted by these companies’ deceptive marketing practices.”

“Unfortunately, because of extended travel and multiple relocations, often related to their service, servicemembers and veterans are particularly vulnerable to scams. The VA and the Bureau have long been aware of one such scam: direct-mail advertisements that contained inadequate disclosures or misleading and deceptive statements pertaining to VA home loans,” the lawmakers continued. “For instance, in 2016, the Bureau released a snapshot of servicemember complaints and highlighted that veterans had reported receiving misleading advertisements. And in November 2017, the VA and the Bureau issued a “Warning Order” alerting servicemembers and veterans to offers of mortgage refinancing that contained deceptive or false advertising.”

“As servicemembers, veterans, and their families make sacrifices for our country, they expose themselves to a number of financial risks and challenges; the Bureau must be clear that it is looking out for them in return. We are concerned that there has been no effort to ensure that thousands of servicemembers and veterans are made whole or at least compensated for damages caused by unscrupulous lenders seeking to profit by misleading homeowners,” wrote the lawmakers. 

The full text of the letter can be found here.


Since the beginning of the coronavirus pandemic, complaints to the CFPB have increased 50 percent over the 2019 levels, including thousands of complaints about credit reporting, debt collection, credit cards and prepaid cards, and mortgages. 

Senator Cortez Masto has long fought to ensure that consumers who are victims of unfair, deceptive, and abusive practices receive compensation, both to offset the harm done to them and to prevent future companies from engaging in similar fraud. During a Banking Committee hearing in July, the Senator questioned Director Kathleen Kraninger of the Consumer Financial Protection Bureau (CFPB) about predatory lending practices and inquired about how defrauded consumers could receive restitution when the Bureau determines that the company cannot pay.