On October 26, 2020, the Consumer Financial Protection Bureau (CFPB) issued a consent order against Low VA Rates LLC (Low VA Rates) to address the CFPB’s finding that Low VA Rates sent consumers mailers for mortgage loans guaranteed by the U.S. Department of Veterans Affairs (VA) that contained false, misleading, and inaccurate statements. Low VA Rates’ conduct violated the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule), and Regulation Z. Low VA Rates, a Utah-based mortgage lender and broker incorporated in Colorado and licensed in 48 states and DC, advertised their VA-guaranteed loans through direct-mail primarily to U.S. military servicemembers and veterans. The consent order requires Low VA Rates to pay a civil money penalty of $1,800,000 to the CFPB and imposes requirements to prevent future violations.
The action is the ninth and last case stemming from a CFPB sweep of investigations of multiple mortgage companies that used deceptive mailers to advertise VA-guaranteed mortgages. The CFPB commenced this sweep in response to concerns raised by the VA about potentially unlawful advertising in the mortgage lending market. The CFPB’s response and investigations reflect its commitment to enforcing the laws to ensure the financial marketplace is fair and accurate for all consumers, including servicemembers, veterans, and surviving spouses whom VA-guaranteed mortgages are designed to benefit. The CFPB has obtained more than $4.4 million in civil money penalties as a result of this sweep.
The CFPB found that Low VA Rates’ advertisements:

  • Misrepresented the credit terms of the advertised mortgage loan by stating credit terms that the company was not actually prepared to offer to consumers, including misrepresenting the annual percentage rate applicable to the advertised mortgage.
  • Misrepresented the existence, nature, or amount of cash or credit available to consumers, and used misleading rhetorical questions, in connection with advertised mortgages.
  • Failed to properly disclose, when required by Regulation Z, credit terms for the advertised mortgage, such as the amount of each payment and time period of payments associated with consumers’ repayment obligations over the full term of the loan.
  • Misleadingly indicated that its mortgage products could help consumers eliminate debt.
  • Made misleading comparisons involving actual or hypothetical loan terms in advertisements.

To prevent future violations, the consent order requires Low VA Rates to bolster its compliance functions by designating an advertising compliance official who must review its mortgage advertisements for compliance with mortgage advertising laws prior to use. The consent order also prohibits Low VA Rates from making misrepresentations like those identified by the CFPB through its investigation, and requires Low VA Rates to comply with certain enhanced disclosure requirements.