As a warning to mortgage industry lenders, the Consumer Financial Protection Bureau (CFPB) is investigating Bankrate’s mortgage rate comparison tool on Bankrate.com. Bankrate discussed the CFPB investigation in a recent Securities and Exchange Commission (SEC) filing.
The investigation will examine whether accounting entries may have improperly impacted the company’s reported results, including relative to market expectations at such time.
“We have been responding to ongoing investigations conducted by the staff of the SEC and by the DOJ concerning our financial reporting over various periods of time,” Bankrate stated in the filing. “These matters have required and continue to require us to expend substantial management time and incur significant legal and other expenses. We are attempting to resolve these matters and the Company has agreed to the terms of a potential settlement of the SEC investigation with respect to the Company that the SEC enforcement staff has indicated it is prepared to recommend to the Commission.”
Bankrate says that the CFPB issued Civil Investigate Demands to the company and its employees, according to the filing. The CFPB requested that Bankrate provide unmentioned documents and answer questions related to the quality control process for determining mortgage rate tables. The Bureau also made note of potential claims it may use against the company in the event of a lawsuit.
According to the filing, Bankrate agreed to the terms of a potential settlement of the investigation. The proposed settlement is subject to acceptance and authorization by the Commission and would require the Company to pay a $15 million penalty, among other things. No terms of the settlement have been approved as of now, so there is no guarantee that the SEC investigation will be successful, the settlement amount will be as anticipated, or that the reserve with respect thereto will be sufficient.
“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.
Click here to view Bankrate's Securities and Exchange Commission 8K filing.
Click here to view Bankrate's Securities and Exchange Commission 10K filing.