CFPB Forces Auto Lender to Make $6.5 Million Refund
Making good on its word to track concerns such as questionable interest rates and discrimination, the Consumer Financial Protection Bureau recently sent a stern message that it is monitoring auto lenders’ activities.
The CFPB said it has ordered U.S. Bank and one of its nonbank partner companies to return nearly $6.5 million to military service members for engaging in deceptive auto loan sales and marketing practices.
The CFPB said U.S. Bank also failed to properly disclose schedule of payments. Since the bank required service members to pay by military allotments, which they knew would be deducted from their paychecks twice a month, U.S. Bank should have informed them that they had to make payments twice per month.
However, the bank told service members that payments were due only once a month and only credited their accounts once a month, according to the CFPB. The lag between when the payment was deducted and when it was credited cost service members additional interest, which was an extra $75 over the life of a typical MILES loan, the agency said.