CFPB, FTC file amicus brief against Ocwen over servicing ‘convenience’ fees

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) announced this week that they have filed an amicus brief in the U.S. Court of Appeals for the Eleventh Circuit, supporting plaintiffs that allege unlawful fees imposed by Ocwen Loan Servicing, a division of Ocwen Financial Corp.

The case involves plaintiffs Sheryl Glover and Cathy Booze, who allege in their complaint that Ocwen charged them certain “convenience fees” on multiple occasions for transactions conducted online or over the phone. In 2019, they filed suit against Ocwen alleging that such fees were in violation of the Fair Debt Collection Practices Act (FDCPA).

After a series of procedural hurdles and delays, the presiding judge decided primarily in favor of the plaintiffs in August 2023, and Ocwen filed an appeal less than a week later. On Feb. 27, the CFPB and FTC filed their amicus brief, along with a blog post on the CFPB website that details the agencies’ interest in the case.

“The CFPB and the Federal Trade Commission, which shares enforcement responsibility for the FDCPA, found that one mortgage servicer is arguing in court that it can charge people fees for paying their mortgage online or by phone, instead of by mailing a check, even though the borrowers didn’t agree to those fees when they took out their loans and there isn’t any law affirmatively allowing them,” the post stated.

“That isn’t right, and we have filed an amicus brief in the U.S. Court of Appeals for the Eleventh Circuit to help ensure people can hold covered mortgage servicers and other debt collectors responsible when they charge prohibited fees.”

In recapping the details of the case, the agencies explained that Ocwen’s appeal is based on an argument “that the FDCPA’s protections don’t apply to this type of fee,” and that the company contends “that they should be able to charge these fees because people agree to pay them once it’s time to make their payment.”

The agencies’ position, however, is that the provisions of the FDCPA apply “to all fees related to collection of a debt,” and that only fees that were expressly agreed to by borrowers — or those that “are affirmatively permitted by a law” — can be charged.

The agencies claim that this is a standard established by legal precedent and “is what Congress intended” when it approved the FDCPA in 1977. It was signed into law by President Jimmy Carter that September.

“The CFPB will continue to do everything we can under the law to ensure that illegal junk fees don’t drive prices up in the consumer financial marketplace,” the bureau wrote.

Attorneys for Ocwen have not yet responded to the amicus brief in court.