On March 19, 2019, the California Department of Business Oversight (“DBO”) announced that it filed an action to void the loans and revoke the licenses of a Southern California auto title lender for repeated breaches of the state’s California Financing Law, Fin. Cod. section 22000 et seq. DBO alleges that the auto lender illicitly added fees to the principal of loans to avoid interest-rate caps on smaller loans and failed to properly assess borrowers’ ability to repay loans as required under Section 1452 of Title 10 of the California Code of Regulations. The DBO further alleged that the lender issued misleading advertising, operated from unlicensed locations, and failed to maintain adequate records. The accusation seeks to require the lender to either forfeit any interest or charges or void all loans where it charged excess interest and charges. The CBO also seeks to revoke the auto lender’s state lending license.
Blog Enforcement Watch March 20, 2019