CFPB enforcement actions on military lending violations
In continuing with a busy start to 2023, the Consumer Financial Protection Bureau (CFPB) has brought a couple of interesting enforcement actions for violations that predominantly affect military families.
CFPB’s Action Against TitleMax
The first action is the CFPB’s enforcement action against TMX Finance LLC (TitleMax). On February 23rd, the CFPB filed a Consent Order in the action. According to the Consent Order, The CFPB found that TitleMax violated “ the financial rights of military families and other consumers in providing auto title loans.” The CFPB explains:
“The CFPB found that TitleMax violated the Military Lending Act by extending prohibited title loans to military families and, oftentimes, by charging nearly three times over the 36% annual interest rate cap. TitleMax tried to hide their unlawful activities by, among other things, altering the personal information of military borrowers to circumvent their protected status. The CFPB also found that TitleMax increased loan payments for borrowers by charging unlawful fees.”
According to the Consent Order, the CFPB found that TitleMax charged non-file-insurance fees that did not benefit the consumer or was used to obtain non-file-insurance coverage and violated the Military Lending ACT (MLA) by loans that exceeded the 36% cap. Ultimately, the CFPB found that TitleMax violated the Truth in Lending Act, the MLA, and the Consumer Financial Protection Act.
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