The CFPB issued the fine to USAA Federal Savings Bank, citing its unauthorized use of the Department of Veterans Affairs' seal and statement in advertisements for VA loan products.
This is not the first time the CFPB has taken action against lenders for improper VA loan advertising. In 2020, seven other lenders were fined for similar offenses, all of which were resolved with consent orders from the CFPB. The CFPB has also announced penalties for two other lenders for improper VA loan advertising in 2021.
In the current case against USAA Federal Savings Bank, the CFPB alleged that the bank had used the VA's seal and statement without authorization in advertisements for its VA home loan products from October 2018 to April 2019. The ads featured the seal and statement prominently and did not clearly state that they were not approved or endorsed by the VA. The CFPB also claimed that the bank had not adequately disclosed important information about the VA loan products it was offering.
As part of the consent order, USAA Federal Savings Bank is now required to pay a civil money penalty of $3.5 million and cease using the VA's seal and statement without authorization. The bank is also required to implement more robust compliance measures related to the marketing and origination of VA loan products.
The CFPB's enforcement actions show that it is taking a hard stance against lenders who engage in misleading VA loan advertising. With its latest fine, the agency has sent a clear message that such behavior will not be tolerated. Such penalties serve as a reminder to other lenders that they must be careful when advertising VA loan products. It is essential for lenders to ensure that their advertisements comply with applicable regulations and clearly disclose any important information related to the loan products they are offering. Doing so is the best way to avoid potential legal issues.
This article was contributed on Oct 06, 2023
