The CFPB and Credit Repair Cloud, have reached agreement over allegations that the firm helped other credit repair businesses charge illegal fees to consumers.

If approved by a federal judge in the Central District of California, the company would pay a $1 million penalty and its CEO, Daniel A. Rosen would pay a $2 million civil penalty. Under the agreement, Rosen and his company would agree not to assist “any credit repair organization that charges advance fees and either initiates phone calls to consumers or receives phone calls from consumers in response to general marketing, or hires someone else to do so,” the CFPB said.

The agreement also would require that the company and Rosen take steps to ensure that credit repair companies using Credit Repair Cloud stop charging consumers illegal advance fees.

The CFPB said that credit repair companies that use telemarketing are covered by the Telemarketing Sale Rule, which prohibits charging fees until the company has provided a consumer with a credit report that shows the promised results and that was issued more than six months after such results were achieved.

The CFPB said that Rosen was individually liable for the company’s violations because he controlled Credit Repair Cloud, participated in acts of substantial assistance and knew or recklessly disregarded that the company’s marketing services encouraged illegal activities. Rosen’s acts of assistance included training repair companies on the Credit Repair Cloud system, providing sample scripts and offering advice on how and when to collect fees from consumers.

If the agreement is accepted, Credit Repair Cloud and Rosen would be required to submit within 60 days a comprehensive plan designed to ensure that all of the company’s tools and services comply with federal law.