CARY, N.C. -

Steve Levine used both social media and an email message to SubPrime Auto Finance News to convey thought-provoking reaction to Thursday afternoon’s announcement from the Consumer Financial Protection Bureau.

Levine wondered via Twitter if the industry as a whole is “numb” after noticing “just a ripple” soon after the CFPB’s enforcement actions against Clarity Services for alleged misdeeds associated with credit reporting that included an $8 million civil penalty.

Levine’s entire social media post said, “CFPB takes an $8 million chunk out of Clarity Services for several issues regarding consumer reporting and it’s just a ripple. Are we numb?”

Perhaps the numb assessment stems from the CFPB handing out several million in penalties within the automotive space so far this year, including actions against DriveTime Automotive, American Honda Finance and Fifth Third Bank.

In a separate message after contacting Levine — who has more than two decades of industry legal experience working with dealerships and finance companies — the attorney who also spent time with AutoStar Solutions added, “I’m not surprised by the size of the penalty. It’s become all too common.

“The CFPB has made it very clear that it takes protection of consumer's credit information seriously, and those dealing in reporting better follow the rules,” added Levine, who now is chief legal and compliance officer of Sigma Payment Solutions and SecureClose..

According to the CFPB, Clarity Services did not follow those rules. In its announcement, the bureau charged that Clarity and Tim Ranney — who is the president, chief executive officer, and founder of the company — generated marketing materials for prospective clients by illegally obtaining tens of thousands of consumer reports from other credit reporting companies without a permissible purpose.

The agency also charged Clarity and Ranney used personal consumer information from these reports to help market its products.

For example, in one instance — although the CFPB says members of Clarity’s own staff objected to the illegal conduct — the bureau indicated Clarity and Ranney illegally obtained more than 190,000 consumer reports from another credit reporting company. As a result, consumers’ credit files wrongly reflected a permissible inquiry by a lender.

Along with the $8 million fine, the CFPB is demanding Clarity make a trio of other changes regarding its use of credit reports.

In a statement sent to SubPrime Auto Finance News, Ranney said, “While we do not agree with the CFPB’s allegations, the settlement allows Clarity Services to move beyond this distraction.

“We are focused on delivering innovative solutions and excellent service to our customers,” he continued. “The settlement will not affect that level of service or Clarity’s level of pricing, innovation or technology platform.”

While it appears by Ranney’s comments that Clarity plans to continue to deliver the alternative data finance companies are using to enhance their scorecards and underwriting, Levine maintained a message he stressed to both dealerships and finance companies during his travels and meetings throughout the year.

“I think this matter reinforces the messages that the bureau has been sending: Make sure your vendors are compliant and can demonstrate the legality of their practices and proceed with caution in activities having to do with credit reporting,” Levine said.

“Much like DriveTime, Tricolor and several other cases, companies had better make sure their policies, procedures and processes for handling consumer disputes are solid,” he added.