On May 21, 2021, the Consumer Financial Protection Bureau (CFPB) announced that it entered into a consent order and stipulation with a California-based company that services subprime auto loans originated by car dealers.
According to the consent order and stipulation, the CFPB found that the company engaged in unfair acts or practices by charging interest on late payments related to loss damage waiver fees, without the knowledge or consent of the consumer, in violation of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531(c), 5536(a). Specifically, the CFPB found that between 2016 and 2021, the company charged $565,813 in interest to roughly 5,800 consumers’ accounts for late payments associated with the fee without disclosing the charge to the account holders.
Under the consent order, the company will pay a total of $565,813 in consumer relief to 5,782 customers, a $50,000 civil penalty, and cease charging interest on late payments of the loss damage waiver fee without disclosing to customers the interest charge and how it accrues. Additionally, the company stipulated that the findings alleged in the consent order were true and could have collateral estoppel effect in future proceedings.
The post Auto Lender Enters Into Consent Order with CFPB appeared first on Consumer Finance Insights (CFI).