On May 8, 2017, the North Carolina Attorney General (“NC AG”) announced that it had obtained a final judgment against an auto title lender and two of its employees in North Carolina State Court. The NC AG alleged that the lender solicited loans online, and required consumers to secure the loans with their vehicle titles. If…
On April 26, 2017, the Consumer Finance Protection Bureau (CFPB) announced that it reached a consent order with an Ohio-based auto lender that allegedly violated a prior CFPB consent order by failing to properly return $1 million in refunds and credits to its customers. According to the CFPB, the auto lender specializes in auto loans to servicemembers. Under…
On March 29, 2017, the Massachusetts and Delaware Attorney Generals (“AGs”) announced settlements with a national bank, resolving allegations that the bank originated unfair and usurious automobile loans in violation of Massachusetts and Delaware consumer protection law. According to the AGs, the bank originated subprime loans to more than 2,000 Massachusetts and Delaware…
On March 24, 2017, the Massachusetts Commissioner of Banks (“Commissioner”) entered into a consent order with a licensed motor vehicle sales finance company, agreeing to refrain from further violations of Massachusetts state law governing the conduct of motor vehicle sales financing. The consent order came after the Commissioner examined the company and subsequently issued a…
On March 14, 2017, the Federal Trade Commission (FTC) announced that it would settle its charges against a Los Angeles-based automotive group for deceptive and unfair sales and financing practices, with the auto group agreeing to pay more than $3.6 million for return to customers. The FTC charged the auto…
On December 17, 2016, the Arkansas Attorney General’s Office (“Arkansas AG”) announced that it had filed a lawsuit against affiliated auto dealerships for violations of the Arkansas Deceptive Trade Practices Act. The Arkansas AG alleged that these auto dealerships would submit loan applications to third-party lenders, who would then deposit…
On November 30, 2016, the Colorado Attorney General’s Office announced that it had secured a judgment in Colorado state court against affiliated lenders who operated an illegal auto title loan scheme. The companies allegedly used fictitious names in extending credit services, and allegedly charged consumers usurious interest rates for personal…
On September 29, the Federal Trade Commission (FTC) announced that it had filed a complaint in the U.S. District Court for the Central District of California against nine auto dealers for purportedly engaging in deceptive and unfair financing practices. The complaint alleges that these auto dealers targeted non-English speaking consumers…
On August 19, 2016, the Kansas Attorney General announced a settlement with a Michigan-based auto credit company for “improperly disclaiming warranties in contracts with Kansas consumers in violation of the Kansas Consumer Protection Act.” According to the company, the warranties were disclaimed inadvertently. Under the terms of the settlement, each…
On August 8, the Department of Justice (DOJ) announced that an auto financing company agreed to pay $434,500 to settle alleged violations of the Servicemembers Civil Relief Act (SCRA). The DOJ alleged in its complaint that the company illegally repossessed 75 automobiles from service members during their service between 2008…
On July 26, the Department of Justice (DOJ) announced that it filed a lawsuit against a regional credit union over alleged violations of the Servicemembers Civil Relief Act (SCRA). The SCRA prohibits lenders from repossessing servicemembers’ vehicles without a court order while servicemembers are on activity military duty. The DOJ alleged in…
On June 8, 2016, the Michigan Attorney General announced that a Michigan court entered a default judgment and permanent injunction against an automobile title loan company over alleged usurious loans that violated the Michigan Consumer Protection Act. According to the Attorney General, the company charged usurious interest rates on automobile title loans, engaged…
This time last year, LLW reported on the Department of Justice going after subprime auto lenders, and more recently we have reported on the CFPB’s targeting of subprime auto lenders. But Massachusetts has also gotten in on the regulatory action. On March 16, 2016, the Massachusetts Attorney General’s Office (MAG) announced that American Credit…
On March 16, 2016, the Massachusetts Attorney General’s Office announced that two financial services companies specializing in auto loans agreed to pay a total of $7.4 million in restitution to Massachusetts consumers over allegations the companies charged excessive interest rates on auto loans. According to the Massachusetts AG, the companies purchased loans from primary creditors…
On March 18, 2016, the Massachusetts Attorney General announced that it obtained a preliminary injunction against an online auto lender over claims the company originated loans with illegal interest rates and fees in violation of Massachusetts usury laws. According to the Attorney General, the company offered online title loans to…
On February 2, 2016, the Consumer Financial Protection Bureau announced a settlement with an auto manufacturer resolving claims of alleged discrimination under the Equal Credit Opportunity Act. Under the terms of the settlement, the auto manufacturer will pay “$21.9 million in restitution to thousands of African-American and Asian and Pacific Islander…
Scrutiny of the CFPB’s auto-lending supervision and enforcement practices was renewed last week when Republicans on the U.S. House of Representatives Committee on Financial Services issued another scathing report criticizing the agency, this time focusing on its handling of the distribution of the Ally Financial auto-lending settlement funds. Concurrently with…
On January 21, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into an administrative consent order with a Colorado “buy here, pay here” used car dealer related to its auto loan financing practices between January 2012 and May 2014. The consent order alleged that the auto dealer hid the total cost of…
On January 20, the New York Attorney General’s Office (Attorney General) announced that it had filed a complaint against several New York auto dealerships over allegations that the dealerships sold deceptive “after-sale” products to consumers. The lawsuit alleges that the dealerships partnered with an independent credit repair company to charge 1,426 consumers…
In December 2015, the CFPB took action against non-bank auto lender CarHop. In so doing, the CFPB continued to carry out its stated intention of expanding its regulatory oversight to large non-bank auto lenders. The CFPB ordered CarHop and its affiliated financing company, Universal Acceptance Corporation (Universal), to cease their…