Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 4 posts in Pay Day Lending.

CFPB Takes First Action Against Online Loan Servicer

On December 16, 2013, the CFPB initiated its first action against an online loan servicer. CashCall, Inc. allegedly engaged in unfair, deceptive, and abusive practices. The CFPB investigation uncovered evidence that the company had violated either licensing requirements or interest-rate caps in at least eight states: Arizona, Arkansas, Colorado, Indiana, Massachusetts, New Hampshire, New York, and North Carolina. According to the CFPB, the loans included amounts ranging from $850 to $10,000, with annual interest rates between 90% and 343%. As a result of the violations, the loans were rendered void or nullified in whole or in part. In this case, a third-party lender allegedly made usurious loans and CashCall then undertook servicing and collecting on those void or nullified loans.  Because the usurious loans were void or nullified, the CFPB alleged that CashCall was attempting to collect on a debt that borrowers did not owe.  The goal of the action is to make CashCall refund money it received from void or nullified loans and pay additional damages and penalties. Read More ›

CFPB Fines Payday Lender Over Claims of Robo-Signing

As previously mentioned in this blog, the Consumer Financial Protection Bureau (CFPB) recently announced that it would begin fielding complaints about payday lenders.  On November 20, 2013, the CFPB announced its first enforcement action against a payday lender.  The CFPB ordered Fort Worth, Texas-based Cash America International, Inc. to refund consumers for robo-signing court documents in debt collection lawsuits.  Read More ›

CFPB Begins Accepting Payday Lending Complaints

On Wednesday (November 6, 2013) the Consumer Financial Protection Bureau (CFPB) announced that it would begin fielding complaints about payday lenders. In a statement Wednesday, CFPB director Richard Cordray said that the CFPB’s review of payday lending complaint would give consumers a new place to turn when they have issues with payday lending practices.  Read More ›

Payday Lending in the Crosshairs? CFPB Issues Opening Salvo In Efforts to Restrict Payday Lending Market

Yesterday (4/24/2013), the CFPB issued a 43-page white paper—in advance of a full report due later this spring—on payday and deposit advance loans, concluding these loans “raise substantial consumer protection concerns.” During its year-long investigation, the CFPB reviewed approximately 15 million loans from lenders in 33 states.  While Director Cordray acknowledged that the study found that payday loans “can be helpful” and “may work for some consumers for whom an expense needs to be deferred for a short period of time,” the study concluded that these loans and advances “may become harmful for consumers when they are used to make up for chronic cash flow shortages” and that “the high cost of the loan or advance may itself contribute to the chronic difficulty such consumers face in retiring the debt.” What is most remarkable about the report is not what says, but what it does not say: The report is devoid of any findings, much less a suggestion, that any payday lenders actually engaged in any improper practices. Read More ›