Blog Enforcement Watch March 05, 2021

Virginia AG Settles with Open-End Credit Lender

On March 4, 2021, Virginia’s Attorney General (AG) announced that it had reached a settlement with an open-end credit lender, resolving allegations that the lender violated the state’s consumer finance statutes.

The AG alleged that from September 2013 through July 2017, the lender charged $100 origination fees on loans that were in a statutorily mandated finance charge-free grace period.  The state also alleged that the lender engaged in a pattern of “rollover” loans, where consumers were required to close accounts that they paid down to a $0 balance but permitted to open new accounts on which new fees were charged on a monthly basis.

Under the settlement agreement, the lender agreed to pay $850,000 in restitution and over $10 million in debt forbearance.  Additionally, the lender agreed to pay the state $150,000 in enforcement costs.

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