Tuesday, December 3, 2013

Payday lender gets tagged with huge fine

The Teamsters strongly support the new Consumer Financial Protection Bureau to protect American workers from predatory banks -- and the agency has done exactly what we hoped it would. The CFPB is cracking down on financial companies that cheat and lie to their customers -- like Cash America, a payday loan company that rips off active servicemen and women.

Here's the latest from Credit Slips:
The CFPB just settled an enormous enforcement action against payday lender Cash America. Under the settlement, Cash America will pay $5 million in penalties and $14 million in refunds to overcharged customers. 
The Washington Post reported the disgusting details about Cash America:
For five years, employees at Cash America, one of the country’s largest payday lenders, were told to stamp a lawyer’s signature on court documents used to sue customers for past-due debts. 
This “robo-signing” helped the company improperly squeeze money out of at least 14,397 Americans, who are entitled to millions of dollars in restitution... 
The bureau also discovered instances of Cash America charging active-duty service members and their families more than 36 percent interest on payday loans in violation of the Military Lending Act, according to the enforcement order. 
The CFPB found that Cash America or its affiliates robo-signed documents in debt collection lawsuits, made loans to military servicemen in violation of the federal Military Lending Act, and even destroyed documents during discovery.
The good news is that Cash America probably would have gotten away with it had the CFPB not been created in 2011. Check out its website here.