On August 4, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that it filed a complaint against several interrelated offshore companies accused of engaging in usurious lending. The complaint alleges that the companies originated, serviced and collected payday loans from consumers in all 50 states through the Internet. It is alleged that companies collected money from borrowers that was not in fact owed because the interest rates charged are void in seventeen states. The CFPB also claims that the companies deceived consumers into believing state and federal law did not govern their loans, falsely threatened borrowers with lawsuits or imprisonment, and used unlawful wage-assignment clauses in loan agreements.
The CFPB brought the action under the Consumer Financial Protection Act of 2010 and the Credit Practices Rule. The suit seeks to permanently enjoin the companies’ lending activities and obtain monetary relief for consumers. The complaint was filed in the U.S. District Court for the Southern District of New York.
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