CFPB and NYDFS File Lawsuit against Companies Offering Pension Advance Loans
On August 20, 2015, the Consumer Financial Protection Bureau (CFPB) and the New York Department of Financial Services (NYDFS) filed a lawsuit against two companies (Pension Funding, LLC and Pension Income, LLC) and three of the companies' individual managers for deceiving consumers about the costs and risks of their pension advance loans. The companies marketed the pension advance loans to military veterans, retired civil servants, and consumers with corporate pensions.
CFPB Targets Healthcare Credit
On August 19, 2015, the CFPB finalized a consent order against Springstone Financial, LLC, the administrator of a healthcare financing program that offers an installment loan product (with APRs ranging from 3.99% to 17.99%) and deferred-interest loan product (with no interest if paid off during the promotional period). The CFPB's consent order focuses on healthcare providers' misleading and deceptive representations regarding the deferred-interest loan product, which Springstone terminated in December 2014.
CFPB Enters into Consent Order Regarding Deceptive Deposit Practices
On August 12, 2015, the CFPB, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) took action against Citizens Bank for failing to credit consumers the full amounts of their deposited funds. As a result of the bank's unfair practices in connection with deposit processing, the CFPB ordered the bank to pay approximately $11 million in refunds to consumers and a $7.5 million penalty for the violations. The bank's board must also establish a compliance committee to monitor and coordinate the bank's adherence to the CFPB's order.
CFPB Sues Offshore Payday Lender
On August 4, 2015, the CFPB announced that it filed a lawsuit in federal district court against NDG Enterprise (NDG), a complex web of commonly controlled companies, for collecting money consumers did not owe. The complaint alleges that NDG violated the Dodd-Frank Wall Street Reform and Consumer Protection Act's prohibition on unfair, deceptive, and abusive acts and practices.
Former Bank Official Pleads Guilty to Interfering with Examination
On July 30, 2015, the Department of Justice announced that Timothy Owens, CEO and Chairman of Voyager Bank and CEO of the bank's holding company, Voyager Financial Services Corporation (VFSC), pleaded guilty for obstructing an examination by the Board of Governors of the Federal Reserve (Fed). The guilty plea is the result of a multi-agency investigation of Owens' conduct and representations during the Fed's 2009 investigation of VFSC.
CFPB Releases Monthly Complaint Snapshot of Consumer Trends
On August 25, 2015, the CFPB released its monthly consumer complaints snapshot. This is the second monthly report highlighting trends from consumer complaints. Each month, the report focuses on a specific product, provides an overview of national complaints, and provides a geographic spotlight.
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For more information, please contact Venable's CFPB Task Force.