CFPB Hits National Payday Lender
According to the agency, the firm will also pay $5 million in fines.
“This action brings justice to the Cash America customers who were affected by illegal robo-signing, and shows that we will vigilantly protect the consumer rights that servicemembers have earned,” said CFPB Director Richard Cordray.
“We are also sending a clear message today to all companies under our watch that impeding a CFPB exam by destroying documents, withholding records, and instructing employees to mislead examiners is unacceptable,” Cordray’s statement said.
The agency cited the firm for having improperly signed documents as part of litigation brought by its debt collection subsidiary in Ohio, Cashland Financial Services Inc., affecting up to 14,000 consumers, the CFPB said Wednesday.
CFPB also took Texas-based Cash America to task for making payday loans to members of the armed services at more than 36% and impeding the agency's investigation into its activity.
According to CFPB, Cash America's online lending subsidiary, Enova Financial, instructed employees to limit the information they provided to the CFPB about their sales and marketing pitches; deleted recorded phone calls with consumers; continued to shred documents after the CFPB told them to halt such activities; and withheld a report related to robo-signing practices.
To settle the complaint, the firm has already started repaying consumers, will drop existing litigation against consumers and will improve its internal monitoring and reporting systems to ensure future compliance, the agency said.