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Short-term lenders in UDAAP settlement with CFPB

Cleveland, TN
06/02/2020
Fine Amount: 
$1 (plus redress)
Penalty Type: 
Issued by: 

The CFPB has completed a settlement agreement in the matter of Main Street Personal Finance, Inc., ACAC, Inc. d/b/a Approved Cash Advance, and Quik Lend, Inc., payday and installment loan lenders based in Cleveland, Tennessee. The companies offer payday and auto-title loans and own and operate over 150 stores in the states of Alabama, Louisiana, Michigan, Mississippi, Oklahoma, South Carolina, Tennessee, and Virginia.

The Bureau found that the companies provided deceptive finance charge disclosures in violation of the Consumer Financial Protection Act (CFPA) and the Truth in Lending Act (TILA), violated the CFPA and TILA by failing to refund overpayments on its loans, and violated the CFPA by engaging in unfair debt collection practices. The consent order prohibits the companies from engaging in this unlawful conduct in the future and requires it to pay consumer redress and a civil money penalty.

The Bureau determined that the companies--

  • violated the CFPA’s prohibition against engaging in deceptive acts or practices and TILA by concealing and understating the actual finance charges of its auto-title loans, which are called auto-title pledge transactions under Mississippi state law, for over 4,000 consumers. Consumers paid a total of over $3.5 million more than the finance charge listed in loan disclosures.
  • violated the CFPA’s prohibition against unfair acts or practices and TILA by retaining consumers’ overpayments on their loans for months and sometimes years instead of returning those funds to consumers.
  • engaged in unfair debt collection practices in violation of the CFPA when it made numerous calls to consumers’ workplaces, references, and other third parties after being asked to stop, and improperly disclosed consumers’ debts to third parties or used tactics that risked such disclosure.

Under the consent order, the Bureau imposed a judgment of about $3.5 million in consumer redress, suspended upon payment of $2 million of the judgment and a $1 civil money penalty. The companies bars the companies from misrepresenting finance charges in their auto-title pledge transactions, requires them to ensure that consumers with credit balances over $1 are refunded timely, and prohibits them from engaging in the same unlawful debt collections practices.

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