On September 5, 2017, the CFPB entered into a consent order with Zero Parallel, LLC (“Zero Parallel”), an online lead aggregator based in Glendale, California. At the same time, it submitted a proposed order in the U.S. District Court for the Central District of California, where it is litigating with Zero Parallel’s CEO, Davit Gasparyan.… Continue Reading
Ninth Circuit affirms tribal lenders subject to CFPB investigative demands
The Ninth Circuit recently issued its opinion in CFPB v. Great Plains Lending, LLC, et al., in which three tribal-affiliated, for-profit lending companies (“Tribal Lenders”) challenged the authority of the CFPB to issue civil investigative demands (CIDs) against Native American tribes.
In 2012, the CFPB issued CIDs against the Tribal Lenders regarding their advertising, marketing, origination, and collection of small-dollar loan products.… Continue Reading
CFPB issues request for information and report in conjunction with release of proposed payday/auto title/high-rate installment loan rule
In addition to the proposed payday loan rule released yesterday, the CFPB has issued (1) a “Request for Information on Payday Loans, Vehicle Title Loans, Installment Loans, and Open-End Lines of Credit,” and (2) a report titled “Supplemental findings on payday, payday installment, and vehicle title loans, and deposit advance products.”… Continue Reading
NY Fed blog post calls into question objections to payday loans and rollover limits
A blog post about payday lending, “Reframing the Debate about Payday Lending,” posted on the New York Fed’s website takes issue with several “elements of the payday lending critique” and argues that more research is needed before “wholesale reforms” are implemented. The authors are Robert DeYoung, Ronald J. Mann, Donald P.… Continue Reading
CFPB holds hearing on payday and auto title loans in Richmond, VA
On March 26, the CFPB held a public hearing on payday and auto title lending, the same day that it released proposed regulations for short-term small-dollar loans. Virginia Attorney General, Mark Herring gave opening remarks, during which he asserted that Virginia is perceived as the “predatory lending capital of the East Coast,” suggesting that payday and auto title lenders were a large part of the problem.… Continue Reading
CFSA weighs in on CFPB proposed payday regulations
On March 26th, the Community Financial Services Association (“CFSA”) held a press call to address the CFPB’s rulemaking process for developing payday loan regulations. CFSA Chief Executive Officer Dennis Shaul offered brief opening remarks before answering questions from the press immediately prior to a CFPB field hearing on payday loans being held in Richmond, VA.… Continue Reading
CFPB and FTC file lawsuits against online payday lenders
Earlier this month, the CFPB and FTC filed lawsuits against different groups of interrelated companies and their individual principals for engaging in allegedly unlawful online payday lending schemes.
The CFPB’s lawsuit, which the CFPB made public yesterday, was filed under seal on
September 8, 2014 in a Missouri federal court contemporaneously with an ex parte application for a temporary restraining order to halt the defendants’ operation and freeze its assets (which was granted). … Continue Reading
FDIC withdraws list of “risky” businesses alleged to be targeted in “Operation Choke Point”
In an unexpected move earlier this week, the FDIC issued a Financial Institution Letter announcing that it was withdrawing the list of “risky” merchant categories that was included in prior guidance on account relationships with third-party payment processors. Among the listed categories were payday loans and money transfer networks.
At the House Financial Services Committee hearing last week on “Operation Choke Point,” committee members voiced industry charges that FDIC examiners have been using the list to intimidate banks into terminating relationships with companies in the listed categories regardless of whether such companies were engaged in legitimate activities and operating lawfully.… Continue Reading
CFPB obtains $10 million of relief for payday lender’s collection calls
Yesterday, the CFPB and ACE Cash Express issued press releases announcing that ACE has entered into a consent order with the CFPB. The consent order addresses ACE’s collection practices and requires ACE to pay $5 million in restitution and another $5 million in civil monetary penalties.
In its consent order, the CFPB criticized ACE for: (1) instances of unfair and deceptive collection calls; (2) an instruction in ACE training manuals for collectors to “create a sense of urgency,” which resulted in actions of ACE collectors the CFPB viewed as “abusive” due to their creation of an “artificial sense of urgency”; (3) a graphic in ACE training materials used during a one-year period ending in September 2011, which the CFPB viewed as encouraging delinquent borrowers to take out new loans from ACE; (4) failure of its compliance monitoring, vendor management, and quality assurance to prevent, identify, or correct instances of misconduct by some third-party debt collectors; and (5) the retention of a third party collection company whose name suggested that attorneys were involved in its collection efforts.… Continue Reading
CFPB confirms plans for auto finance larger participant rule in rulemaking agenda
In the latest semi-annual update of its rulemaking agenda, the CFPB officially confirmed that it plans to propose a rule to define “larger participants of a market for auto lending.” The official confirmation follows statements made by Steven Antonakes at a Consumer Bankers Association meeting in April 2014 that the CFPB’s next larger participant rule would relate to auto finance. … Continue Reading