In a recent press release, the Pennsylvania Attorney General announced that settlements have been reached with Delaware and Florida lenders who made allegedly usurious loans to Pennsylvania residents. In apparent support of the settlement, the press release cites the Third Circuit’s decision in TitleMax of Delaware, Inc. v. Weissman, in which an out-of-state lender unsuccessfully sought to enjoin the Pennsylvania Department of Banking from investigating loans made to Pennsylvania residents. … Continue Reading
Auto Title Loans
California DFPI announces consent order with auto title loan servicer that was subject of “true Lender” investigation
Last week, the California Department of Financial Protection and Innovation (DFPI) announced that it had entered into a consent order with Wheels Financial Group, LLC d/b/a LoanMart, a California-based company that markets and services automobile title loans. LoanMart was the subject of an investigation launched in September 2020 in which the DFPI (then still named the Department of Business Oversight) was investigating whether LoanMart, through its partnership with a Utah bank, was evading the interest rate cap in the Fair Access to Credit Act (FACA). … Continue Reading
CFPB Issues Report on Consumer Use of Alternative Financial Services
As part of its Making Ends Meet survey, the CFPB issued a report last week on how consumers use payday, auto title, and pawn loans (“alternative financial services” or “AFS”) and the other sources of credit available to them. Consumers surveyed include only those with a traditional credit record and the sampling focused on consumers with lower credit scores, recent credit delinquencies, or living in rural areas.… Continue Reading
CFPB enters into consent order with small-dollar lender to settle alleged TILA and UDAAP violations
The CFPB announced that it has entered into a consent order with Main Street Personal Finance, Inc. and two subsidiaries (Main Street), each a small-dollar lender, to settle the CFPB’s allegations that Main Street (1) violated the Truth in Lending Act and the CFPA’s UDAAP prohibition by underdisclosing the finance charge on auto-title loans entered into with Mississippi consumers and failing to make timely refunds of credit balances, and (2) violated the UDAAP prohibition by making collection calls to consumers’ workplaces and references.… Continue Reading
CA Dept. of Business Oversight files action against title lender for CA law violations; launches investigation into whether lender’s interest rates are unconscionable
The California Department of Business Oversight (DBO) has filed an administrative enforcement action against a title lender for alleged violations of California law and launched an investigation into whether the interest rates charged by the lender are unconscionable.
According to the DBO’s Accusation, the lender is licensed under the California Financing Law (CFL). … Continue Reading
CFPB enters into consent order with small-dollar lender to settle alleged TILA and UDAAP violations arising from finance charge disclosure on auto title pledges
The CFPB announced last week that it has entered into a consent order with Triton Management Group, Inc., a small-dollar lender, to settle the CFPB’s allegations that Triton had violated the Truth in Lending Act and the CFPA’s UDAAP prohibition by underdisclosing the finance charge on auto title pledges entered into with Mississippi consumers.… Continue Reading
Deadline expires for CRA resolution to override CFPB payday lending rule
The 60-day period during which the Senate could pass a resolution under the Congressional Review Act disapproving the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) with only a simple majority appears to have expired yesterday. Although the Senate’s failure to pass a CRA resolution is disappointing because the CRA would have provided the “cleanest” vehicle for overturning the Payday Rule, we were always doubtful that there would be 51 votes in the Senate to pass a CRA resolution.… Continue Reading
CFPB final payday/auto title/high-rate installment loan rule published in Federal Register
The CFPB’s final payday loan rule was published in today’s Federal Register. Lenders covered by the rule include nonbank entities as well as banks and credit unions. In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans. For a summary of the rule, see our legal alert.… Continue Reading
Proposed bill would significantly expand MLA disclosure requirements
We recently reported on a bill introduced in the House of Representatives by Congressman Dan Kildee (D-Michigan) that would amend the Military Lending Act (“MLA”) to require that creditors provide additional disclosures to covered members of the armed forces and their families. The text of H.R. 2697 is now available.
Titled the “Transparency in Military Lending Act of 2017,” the bill would add the following items to the list of mandatory disclosures required under the MLA:
- A statement that the Department of Defense (“DoD”) and each service branch offers a variety of financial counseling services.
ABA highlights error in cost of credit calculation method used in CFPB’s proposed payday loan rule
At the meeting earlier this month of the American Bar Association’s Consumer Financial Services Committee in Carlsbad, CA, attention was given to an issue highlighted by the American Bankers Association in the comment letter it submitted on the CFPB’s proposed payday/auto title/high-rate installment loan rule.
The CFPB’s proposal provides a method to calculate the total cost of credit used to determine whether a loan would be a “covered loan.” … Continue Reading