The Consumer Financial Protection Bureau is investigating Bankrate (RATE) over the mortgage rate comparison tool on Bankrate.com. Bankrate disclosed the CFPB investigation in a filing with Securities and Exchange Commission.
The inquiry could serve as a wakeup call as many websites in the mortgage space offer rate trackers as a service.
In the filing, Bankrate states that the company and several of its employees received Civil Investigative Demands from the CFPB, requesting that the company produce “certain documents” and answer questions relating to the company’s quality control process for its mortgage rate tables.
Bankrate states that it cooperated and responded to the CFPB’s request. After complying with the CFPB’s request, Bankrate said that it received a communication from the CFPB requesting Bankrate respond to the issues identified by the CFPB in the form of a Notice of Opportunity to Respond and Advise.
Bankrate said that in that communication, the CFPB also identified potential claims it might bring against the company.
Bankrate said that it responded to the CFPB’s second request, adding that it believes its response to the CFPB’s second request addresses the CFPB’s issues with its mortgage rate tables and its quality control process.
The Bankrate SEC filing does not provide any additional details about the nature of the investigation or what documents the CFPB requested.
Bankrate notes that the investigation is still ongoing and is unsure of what the results of the CFPB’s investigation will be.
“We are unable to predict when the CFPB investigation will be completed or the final outcome of the investigation, and cannot presently estimate the amount of loss, if any, that would result from an adverse resolution of this matter,” Bankrate said in the SEC filing.
The CFPB’s investigation into Bankrate’s mortgage rate comparison tool is noteworthy, considering the uproar over the launch of the CFPB’s own mortgage rate checker earlier this year.
The CFPB’s mortgage rate checker is part of its “borrower education tool.”
As part of the “Owning a Home” consumer tool, the CFPB included a “Rate Checker,” which it touted as a tool to help consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets.
Mortgage lenders, including the Mortgage Bankers Association, greeted the CFPB’s tool unceremoniously. The MBA suggested the Rate Checker mentions rates and costs without including disclosure items TILA-RESPA rules and the CFPB mandate for borrowers – annual percentage rate, closing fees, etc.
Essentially, mortgage bankers said that if the Rate Checker were a lender advertisement or mortgage calculator, it would violate the CFPB’s disclosure rules.
Mortgage rate checkers are becoming more commonplace on the web.
In March, Gigaom reported that Google (GOOG) is preparing to launch a mortgage comparison tool of its own via its Compare service. Google already offers a mortgage comparison tool in the United Kingdom. In the U.K, Google Compare features car insurance, travel insurance, credit cards, and mortgages.
Of course, the U.K. doesn’t have the CFPB to deal with. But now Bankrate does.
When reached via email by HousingWire, a Bankrate spokesperson said that the company is unable to add any additional comment outside of what was disclosed in the SEC filing.
“Importantly, as always our focus remains on being a great resource and partner to our many consumers, advertisers and business partners,” the spokesperson told HousingWire.
A spokesperson for the CFPB said that the CFPB declines to comment on the existence or status of any investigation.
