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A federal regulator set up after the financial crisis to be a watchdog over the financial industry is shifting its mission from enforcement to consumer education, the Wall Street Journal reported. Under the leadership of Kathy Kraninger, a Trump appointee who took over the agency seven months ago, the Consumer Financial Protection Bureau has increased its focus on financial literacy. The CFPB continues to boost spending on consumer education and engagement this year, after raising such spending by 76 percent during the fiscal year ended Sept. 30, 2018, to $77.8 million, nearly twice the level from two years earlier when Obama officials still ran the bureau. The shift was apparent when the CFPB showcased its work under Kraninger in June, leading with a program it created to help consumers build emergency savings called “Start Small, Save Up.” The CFPB also plans to roll out soon a saving “boot camp,” a series of videos and booklets to teach consumers how to save, CFPB officials said.

Freedom Debt Relief LLC, the largest U.S. debt settlement services provider, agreed to pay $25 million to resolve U.S. regulatory allegations it imposed improper charges on consumers and failed to settle their debts as promised, Reuters reported. The U.S. Consumer Financial Protection Bureau said yesterday that Freedom will pay a $5 million civil fine and $20 million of restitution to settle its lawsuit. It also entered a related consent order with the Federal Deposit Insurance Corp. Freedom did not admit or deny wrongdoing in the settlement, which also resolves claims against Andrew Housser, the San Mateo, California-based company’s co-founder and co-chief executive. Court approval is required. Freedom, part of the Freedom Financial Network, said that it will change some policies and disclosures in connection with the settlement and worked with the CFPB to address its concerns. Freedom said in February that it has negotiated more than $10 billion of consumer debt and enrolled over 600,000 clients. The CFPB had accused Freedom of misleading consumers about creditors’ willingness to negotiate, charging fees after having consumers negotiate their own settlements and falsely claiming it charged fees only on debt settlements it negotiated. It also accused Freedom of failing to tell consumers they could reclaim money deposited in their accounts if they exited their debt settlement programs.

Think Finance Inc. will cancel outstanding loans as part of a nationwide settlement of accusations it preyed on consumers, and hand over $40 million to fund efforts to return money to victims of an alleged payday lending scheme, WSJ Pro Bankruptcy reported. Months in the works, the settlement with consumer advocates was hatched in a chapter 11 proceeding that began in 2017 when Think Finance filed for bankruptcy protection in Dallas. Consumer watchdogs including Pennsylvania Attorney General Josh Shapiro, had accused Think Finance of peddling online loans with illegally high interest rates. The state sued in 2014, accusing Think Finance of hiding illegal loans by claiming the lending was being done by Native American tribes. Similar lawsuits were filed in multiple states and obtained class-action status in the company’s bankruptcy. Think Finance denied the accusations, saying that it was merely a financial technology provider, not a lender. So-called “rent-a-tribe” schemes alleged in other lawsuits nationwide leverage the special sovereignty of tribes to evade state-law restrictions on interest rates on short-term loans offered to consumers. The Pennsylvania attorney general contended the tribes were fronts for otherwise illegal lending, skimming a small percentage of the profits in exchange for the use of their names.

More than 18,000 students who attended a now-defunct for-profit college will have $168 million in private loan debt discharged, MarketWatch.com reported. The loan cancellation is part of a proposed deal between the Consumer Financial Protection Bureau, attorneys general of 43 states and the District of Columbia and Student CU Connect (or the CUSO), a company that held and managed private loans taken out by students at ITT Tech. The agreement comes as the court overseeing ITT’s bankruptcy approved a settlement between CUSO and ITT’s bankruptcy trustee. In its complaint, the CFPB outlined a scheme by which ITT students were lured into taking on high-interest private student debt managed and held by the CUSO that both the company and the school knew they probably wouldn’t be able to repay. As part of the deal, the CUSO neither admitted nor denied most of the agency’s claims. Richard Bernard, an attorney at Foley and Lardner, representing the CUSO, wrote in an emailed statement that the CUSO worked cooperatively with the government and “is gratified” that the settlements will benefit ITT students. In its complaint, the CFPB outlined a scheme by which ITT students were lured into taking on high-interest private student debt managed and held by the CUSO that both the company and the school knew they probably wouldn’t be able to repay. As part of the deal, the CUSO neither admitted nor denied most of the agency’s claims.

In a stealth aftershock of the Great Recession, nearly 100,000 loans that allowed senior citizens to tap into their home equity have failed, blindsiding elderly borrowers and their families and dragging down property values in their neighborhoods, USA Today reported. In many cases, the worst toll has fallen on those ill-equipped to shoulder it: urban African Americans, many of whom worked for most of their lives, then found themselves struggling in retirement. Alarming reports from federal investigators five years ago led the Department of Housing and Urban Development to initiate a series of changes to protect seniors. USA Today’s review of government foreclosure data found that a generation of families fell through the cracks and continue to suffer from reverse-mortgage loans written a decade ago. Those foreclosures wiped out hard-earned generational wealth built in the decades since the Fair Housing Act of 1968.