On December 30, 2020, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with a lender that provided installment loans to consumers affiliated with the military over the lender’s alleged violations of the Military Lending Act (MLA), Electronic Fund Transfer Act (EFTA), and Consumer Financial Protection Act of 2010 (CFPA).
According to the CFPB, the company originates tens of thousands of loans annually, with individual loans normally ranging from $500 to $10,000. The CFPB alleged that since October 2016, for loans to those affiliated with the military, the company violated the MLA’s prohibition on requiring loans to be repaid by “allotment.” The allotment system, run by the Department of Defense, allows servicemembers to allocate a share of their pay to designated recipients. With respect to consumers not covered by the MLA, the CFPB also alleged that the company violated the EFTA and the CFPA in its provision of loans in requiring borrowers to provide bank-account information and authorize the company to withdraw missed payments from those accounts on the first business day following the missed payment.
The consent order requires the company to pay a $2.175 million civil money penalty.
The post CFPB Announces $2.175 Million Settlement with Company Offering Installment Loans appeared first on Consumer Finance Insights (CFI).