In November, 2013, the Consumer Financial Protection Bureau announced its first enforcement action against a payday lender. Cash America International was fined $5 million and was ordered to refund $14 million to its borrowers due to violations of the Military Lending Act. Recently, the CFPB took action against one of the nation’s largest payday lenders, ACE Cash Express, “for inducing payday borrowers into a cycle of debt”, according to CFPB Director Richard Cordray.
ACE agreed to pay a civil penalty of $5 million, and to pay up to $5 million in refunds to its customers. Although ACE maintains that the practices that the CFPB found illegal ceased in 2012, and involved a very small number of its borrowers, “ACE used false threats, intimidation, and harassing calls to bully payday borrowers” according to Director Cordray. Continue reading this entry