The Consumer Financial Protection Bureau just nailed Cash America!
"Federal regulators have ordered Fort Worth payday lender Cash America to pay up to $14 million in consumer refunds for violating rules involving debt collection lawsuits and overcharging military members.
"The Consumer Financial Protection Bureau also announced today that Cash America will pay a $5 million fine for violating those rules as well as destroying documents prior to the agency’s examination.
CFPB’s enforcement action was its first one against a payday lender.
"The agency found that Cash America engaged in robo-signing, a practice where important documents that require careful review and a signature from a knowledgeable individual were instead signed by someone else without following proper procedures or a machine. In Cash America’s case, the agency said robo-signing was used in documents filed in lawsuits under the company’s debt collection subsidiary in Ohio.
"During a routine examination of Cash America’s practices, financial regulators also found that the company violated the Military Lending Act, which limits the fee to 36 percent on certain loans to serviceman. Cash America provided payday loans that exceeded that rate to more than 300 active-duty service members, according to the CFPB.
"The agency also accused Cash America of impeding its examination by “carelessly” destroying documents, deleting consumer phone calls and continuing to shred documents even after federal regulators told them to stop.
"“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 service members have earned,” CFPB director Richard Cordray said in a statement. “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.”"
(Read the rest of the story here...)
Throughout the past Texas State Legislature has Cash America has, as with the other members of its industry played victim when it comes to its usurious and practices. In negotiations with consumer advocates they fought tooth and nail against all but the most lax and meaningless efforts at reform. There were Texas Senators who did indeed stand up for citizens, the House members on the Investments and Financial Services Committee did not. In the end, it was all that could be done to keep the payday and auto title loan industry from eliminating the right of municipalities to enact ordinances to protect themselves from predatory lenders.
A sign of how powerful this industry is, is the fact that $20 million won't break them. But it's a pretty good signal that the Feds will do what it can, even if the state of Texas won't.