CFPB, Online Lenders Spar Over Interest Rates, Tribal Law
The CFPB has filed a suit against several online lenders, accusing them of charging illegally high interest rates and violating consumer protection laws.
April 27, 2017 at 06:21 PM
6 minute read
The Consumer Financial Protection Bureau has filed suit against four online lenders in California, accusing them of charging interest rates as high as 950 percent in violation of state laws capping interest rates and federal consumer protection law.
Because of the high-cost interest rates, the CFPB alleges in its 29-page complaint filed Thursday, the companies have been illegally collecting debts that were not owed to them. The bureau claims that because the rates exceed interest caps or because the lenders are not licensed in certain states, the loans in 17 states are void.
“Defendants represented expressly or by implication that consumers … had an obligation to repay loan amounts that in fact did not exist because the loans violated state licensing and/or usury laws that declared such loans void,” attorneys for the CFPB wrote in the lawsuit, which was filed in federal district court in Illinois.
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