UNITED STATES OF AMERICA CONSUMER FINANCIAL …

2016-CFPB-0026 Document 1 Filed 12/07/2016 Page 1 of 26

U N ITED S TATES OF AMERICA CON SU MER FIN AN CIAL PROTECTION BU REAU

ADMINISTRATIVE PROCEEDING File No. 20 16-CFPB-0026

In the Matter of:

CON SEN T ORD ER

AMERICAN AD VISORS GROU P

The Consum er Fin ancial Protection Bureau (Bureau) has reviewed the advertising practices of Am erican Advisors Group (Respondent, as defined below). Through these advertising practices, Respondent creates consum er interest in reverse m ortgage credit products. The Bureau has identified the following law violations: (1) Respondent created and dissem inated deceptive and m isleading advertisem ents for reverse m ortgage credit products in violation of the Mortgage Acts and Practices-- Advertising Rule (MAP Rule or Regulation N), 12 C.F.R. Part 10 14; and (2) Respondent created and dissem inated deceptive and m isleading advertisem ents for reverse m ortgage credit products in violation of the Consum er Financial Protection Act of 20 10 (CFPA), 12 U.S.C. ?? 5531(a) & 5536(a)(1)(B). Under Sections 10 53 and 10 55 of the CFPA, 12 U.S.C. ?? 5563, 5565, the Bureau issues this Consent Order (Consent Order).

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I Ju ris d ictio n

1. The Bureau has jurisdiction over this m atter under sections 10 53 and 10 55 of the CFPA, 12 U.S.C. ?? 5563 and 5565 and section 626 the Om nibus Appropriations Act of 20 0 9, 12 U.S.C. ? 5538, as am ended by section 10 97 of the CFPA, 15 U.S.C. ? 1638 note.

II Stip u latio n

2. Respondent has executed a "Stipulation and Consent to the Issuance of a Consent Order," dated Decem ber 1, 20 16 (Stipulation), which is in corporated by reference and is accepted by the Bureau. By this Stipulation, Respondent has consented to the issuance of this Consent Order by the Bureau under sections 10 53 and 10 55 of the CFPA, 12 U.S.C. ?? 5563 and 5565, without adm itting or denying the findings of fact and conclusions of law, except that Respondent adm its the facts necessary to establish the Bureau's jurisdiction over Respondent and the subject m atter of this action. III D e fin itio n s

3. The following definitions apply to this Consen t Order: a. "Advertisem ent" m eans any written or oral statem ent, illustration, or depiction, whether in English or any other language, that is designed to effect a sale or create interest in purchasing goods or services, whether it appears on or in a label, package, package insert, radio, television, cable television, brochure, newspaper, m agazine, pam phlet, leaflet, circular, m ailer, book

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insert, free standing in sert, letter, catalogue, poster, chart, billboard, public transit card, point of purchase display, film , slide, audio program transm itted over a telephone system , telem arketing script, on-hold script, upsell script, training m aterials provided to telem arketing firm s, program -length com m ercial ("infom ercial"), the internet, cellular network, or any other medium. Promotional materials and items and Web pages are included in the term advertisem ent. b. "Board" m eans Respondent's duly-elected and acting Board of Directors. c. "Bureau" m eans Consum er Financial Protection Bureau. d. "Clearly and prom inently" m eans:

i. In textual com m unications (e.g., printed publications or words displayed on the screen of an electronic device), the disclosure m ust be of a type size and location sufficiently noticeable for consum ers to whom the com m unication is targeted, including older Am ericans, to read and comprehend it, in print that contrasts with the background on which it appears;

ii. In communications disseminated orally or through audible means (e.g., radio or stream ing audio), the disclosure m ust be delivered in a volum e and cadence sufficient for consum ers to whom the com m unication is targeted, including older Am ericans, to hear and comprehend it;

iii. In com m unications dissem inated through video m eans (e.g., television or stream ing video), the disclosure m ust be in writing in a form consistent with subsection (i), and m ust appear on the screen for a

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duration sufficient for consum ers to whom the com m unication is targeted, including older Am ericans, to read and com prehend it; iv. In com m unications m ade through interactive m edia such as the internet, online services, and software, the disclosure m ust be presented in a form consistent with subsection (i); and v. In all instances, the disclosure m ust be presen ted before the consum er incurs any financial obligation, in an understandable language an d syntax, an d with nothing contrary to, inconsistent with, or in m itigation of, the disclosures used in any com m unication with the con su m er . e. "Effective Date" m eans the date on which the Consent Order is issued. f. "Enforcem ent Director" m eans the Assistant Director of the Office of Enforcem ent for the Consum er Financial Protection Bureau, or his/ her delegate. g. "Person" m eans an y individual, group, unincorporated association, lim ited or general partnership, corporation, or other business entity. h. "Related Consum er Action" m eans a private action by or on behalf of one or m ore consum ers or an enforcem ent action by another governm ental agency brought against Respondent based on substantially the sam e facts as described in Section IV of this Consent Order. i. "Relevant Tim e Period" includes the period from J anuary 1, 20 12 to the Effective Date.

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j. "Respondent" m eans Am erican Advisors Group (AAG), and any of its divisions, trade nam es or "doing business as" entities, and its successors and a ssign s.

k. "Reverse Mortgage Credit Product" or "reverse m ortgage" m eans a type of hom e loan offered or extended to hom eowners who are generally 62 years or older that allows the hom eowner to borrow m oney against the value of his or her hom e. This definition includes Hom e Equity Conversion Mortgages (HECMs) and HECMs for Purchase.

l. "Service Provider" m eans any person or entity that provides a m aterial service to Respondent in connection with the subject m atter of this Consent Order.

IV Bu re au Fin d in gs an d Co n clu s io n s The Bureau finds the following: 4. Respondent is a national reverse m ortgage lender licensed in 49 states and the District of Colum bia, and headquartered in California. 5. Respondent is an offeror and provider of "m ortgage credit product[s]" as defined by the MAP Rule. 12 C.F.R. ? 10 14.2. 6. Respondent is a "person" under the MAP Rule, 12 C.F.R. ? 10 14.2, because it is a cor p or a t ion . 7. Respondent is a "covered person" under the CFPA because it is a corporation that engages in offering and providing residential m ortgage loans, which are "consum er financial products or services" under the CFPA. 12 U.S.C. ?? 5481(5), (6), (15)(A)(i), (19).

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