CFPB seeks restitution of $ 39 million and a fine of $ 7 from payday lender Think Finance
The Consumer Financial Protection Bureau (CFPB) ad a settlement proposal Wednesday with Think Finance and six of its subsidiaries. The payday lender will have to reimburse consumers $ 39 million and pay the CFPB $ 7, one for each agency in the company.
The office’s lawsuit, filed in November 2017, alleges that the payday lender “engaged in unfair, deceptive and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with illegal loan collection that were void in whole or in part under state laws governing interest rate caps, licensing of lenders, or both. ”The regulations would also prohibit Think Finance entities from offering or collect loans from consumers in any of the 17 states that cap interest rates.
The enforcement measure comes amid a wave of activity for the CFPB, which has continued Citizens Bank last week alleging violations of the Loan Truth Act for failing to properly handle credit card disputes.
Thought Finance, which ended the Chapter 11 bankruptcy in December, operated an online loan creation and management platform and partnered with tribal lenders to offer installment loans online.
The proposed settlement comes about a month before the Supreme Court hears pleadings on March 3 on whether the agency’s single-director structure is constitutional.
This is a provision in the Dodd-Frank Act that allows the president to fire the director of the office only “for cause”.
While some opponents of the agency have called on Congress to structure it as a multi-member commission, the Supreme Court could also declare the agency unconstitutional, resulting in its dissolution.
The agency, which was established in 2010 in response to the 2007-08 financial crisis, announced 22 cases in fiscal 2019, which ended on September 30, according to The Wall Street Journal, nearly double the 12 cases reported by the office the previous year, but just over half the number of cases handled each year from 2015 to 2017. The CFPB announced eight additional execution measures since September 30.
According to the Journal, consumers injured in 22 cases last year recovered $ 777 million, a four-year high.