On May 27, 2021 the Consumer Financial Protection Bureau (CFPB) announced that it had reached a settlement with a Florida-based payday lender and its CEO to resolve a 2020 lawsuit alleging violations of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 5564.
In 2020, and as previously covered by Enforcement Watch, the CFPB filed its complaint against the payday lender and its CEO in the United States District Court for the Southern District of Florida, alleging that the company violated the CFPA by engaging in deceptive acts and practices in connection with the short-term, high-interest loans it offered its consumers, who are predominantly Uber and Lyft drivers. Specifically, the Bureau alleged that the company misrepresented the APR of these loans to be 440% when, in fact, the APRs ranged from 975% to 978%.
If entered by the court, the proposed settlement would require the company to refund an estimated $1 million in deposits to affected borrowers and a $100,000 civil penalty. The company would also be permanently banned from engaging in deposit-taking activity and deceptive practices. As part of this settlement, the company and its CEO neither admitted nor denied any allegations in the 2020 complaint.