b'reiterating the Bureaus intent to begin enforcing theat issue require payment of approximately $51 million in rule beginning on its June 13, 2022 effective date. Asrestitution and civil monetary penalties stemming from noted above, the Bureau also indicated that it intendsthe CFPBs 2015 notice of charges alleging violations to supervise and enforce the payday lending spaceof TILA, EFTA, and the CFPAs prohibition on unfair or vigorously, and that it does not agree with the CFPBsdeceptive practices by (1) continuing to withdraw funds efforts under the prior administration to amend andfrom borrowers accounts after authorization to do so restrict the Rule. Thus, industry participants should behad been revoked; (2) requiring borrowers to repay loans wary of the Bureaus new administration and anticipatevia pre-authorized EFT; and (3) deceiving consumers potential efforts to enforce provisions of the Rule thatabout the costs of short-term loans. The CFPBs decision were removed in 2020.concluded that Integrity Advances motion to stay fail[ed] to make the sort of showing that would warrant FTC Reaches Settlement with Payday Lenders a stay pending appellate review. In particular, the In February, the FTC announced that it had reached a $114Bureau found Integrity Advance (1) had neither shown million settlement with Lead Express, Inc., Camel Coins,that they are likely to succeed on the merits nor raised Inc., Sea Mirror, Inc., Naito Corp., Kotobuki Marketing,a serious legal argument as to whether ratification of Inc., Ebisu Marketing, Inc., Hotei Marketing, Inc., Daikokuthe action was an appropriate remedy for the purported Marketing, Inc., La Posta Tribal Lending Enterprise, andconstitutional injury resulting from the fact that when individual defendants. The settlement resolved allegationsthe notice of charges was brought, the director was not that the defendants operated a tribal lending schemefully accountable to the president; and if it was, then the that allegedly violated the UDAP provisions of the FTCstatute of limitations had already expired; (2) had failed to Act, 15 U.S.C.45(a), the Telemarketing and Consumershow an irreparable injury by the payment of money into Fraud and Abuse Prevention Act (Telemarketing Act), 15an escrow account; and (3) the balance of the equities U.S.C.6101-6108, the TSR, 16 C.F.R. Part 310, TILA, 15tips strongly against Integrity Advance. The CFPB U.S.C.1601-1666j, the EFTA, 15 U.S.C.1693-1693r,did, however, grant a 30-day stay of the order to allow and its implementing regulation E, 12 C.F.R. Part 1005.Integrity Advance to seek a stay from the Tenth Circuit.According to the FTC, the payday lenders operated a fraudulent schemecarried out online under the namesNew Illinois Law Limits Bank and Non-BankHarvest Moon Financial, Gentle Breeze Online, andPartnerships and Drive Payday Lenders OutGreen Stream Lendingin which they misrepresented toIn March, Illinois enacted The Predatory Loan consumers that payday loans would be repaid in a fixedPrevention Act (PLPA), which was designed to prevent number of payments. The FTC alleged that defendants,lenders from taking advantage of minority communities in fact, continued to draw funds from the victims bankby capping payday loans at an interest rate of 36%, accounts after the loans had been fully repaid, resultingas part of a legislative package intended to address in consumers being overcharged millions of dollars.economic inequities. The law applies to all consumer Defendants purportedly only ceased the withdrawal ofloans made or renewed after the effective date, and funds when the consumers closed their bank accounts orwas effective immediately. Although the law generally found another way to stop the fraudulent payments.applies to any person or entity that offers or makes a The settlement provides for a monetary judgment ofloan to a consumer in Illinois, there is an exception for $114.3 million, which has been partially suspended basedbanks, credit unions, and insurance companies that are on inability to pay. The precise amount suspended ischartered by the United States or any state. Exempt presently unknown as the settlement requires defendantsparties, however, may be indirectly impacted by the to turn over all corporate assets, domestic personalapplicability of the law to its non-exempt partners and assets, and certain personal property. In addition, allservice providers. Specifically, a person who does not outstanding consumer loans issued will be consideredmake a loan, but purchases, brokers or acts as an agent paid in full if the original amount of the loan and onefor the party that originates the loan may also be a finance charge have been repaid. Defendants are alsocovered lender.permanently banned from the lending industry.Additionally, the PLPA has a sweeping anti-evasion provision which provides that a person may be a The CFPB Denies Integrity Advance, LLC and itscovered lender by purporting to act as an agent of a Owners Request to Stay $51 Million Decision and Order bank or other exempt party, and engages in marketing, In March, the CFPB denied online payday lender Integrityarranging or brokering loans made by the exempt Advance LLC and its individual owners (collectivelyparty, or holds or acquires the predominant economic Integrity Advance) request to stay a final decision andinterest in the loans generated by the exempt party. order pending appellate review. The decision and orderThat provision appears to have been designed, at least 38'