On September 13, 2018, the Consumer Financial Protection Bureau (“CFPB”) announced that it filed a complaint against a lender, its president, and related entities (“Defendants”) for allegedly making small-dollar loans in exchange for borrowers’ monthly pension payments, which the CFPB alleges is a violation of the Consumer Financial Protection Act, 12 U.S.C. § 5536(a)(1)(B). The Complaint alleges that Defendants misrepresented that the pension-advance products they offered were not loans and misrepresented that the products were not subject to interest rates. The CFPB’s complaint follows in the footsteps of several state agencies that have similarly filed lawsuits concerning the marketing of pension-advance products. (See, for example, Enforcement Watch posts here, here, and here.) The complaint also alleges violations of the Truth in Lending Act (TILA), 15 U.S.C. § 1638(a)-(b), due to Defendants’ failing to clearly disclose the annual percentage rate of the loans. The complaint seeks an injunction, disgorgement, civil penalties, and enforcement costs.
Blog Enforcement Watch October 04, 2018