![]() ![]() The company’s system allowed employees to process these loans. In some cases, TitleMax employees conducted checks with DoD’s Military Lending Act database to verify whether the borrower was active duty or a dependent, but ignored the MLA database responses indicating the consumers were covered by the act. They are among those who will receive $5 million in payments from TitleMax.ĬFPB also accuses TitleMax of doctoring information. Information was not available from CFPB or the consent order about how many individual borrowers are included in those 15,386 loans, or how many were military-connected. According to CFPB, the company claimed the fees were for insurance to protect the company against potential losses, but the insurance product didn’t provide such coverage. In addition to the illegal military loans, 15,386 TitleMax loans included an insurance fee of about $35, with the fee financed through the loan. The agreement is the result of “months of good faith cooperation and discussion between the company and the CFPB,” according to the statement, and the solutions in the agreement “will further support the high-quality service we provide to thousands of customers who rely on TitleMax as a reliable source of credit. … The company’s ongoing cooperation demonstrates its commitment to excellence and partnership with all government regulators.” “Although the company agreed to pay a fine to the CFPB, it did so to avoid lengthy and costly litigation, which would be a distraction for the company’s core business of providing best-in-class services to its customers. ![]() TitleMax “vehemently denies any wrongdoing or liability,” according to a statement from the company. ![]() TitleMax neither admits nor denies any of the findings or conclusions of law, according to the consent order, part of a CFPB administrative proceeding. 23 consent order signed by Rohit Chopra, the bureau’s director.ĬFPB orders TitleMax to stop illegal lending practices and take steps to implement internal controls. ![]() CFPB has set up a process with TitleMax to provide restitution to consumers for illegally charged fees and the interest paid on those fees, the loss of use of funds, the loss of use of vehicles that were wrongfully repossessed, and the replacement value of vehicles that were sold after being wrongfully repossessed, according to the Feb. They may face unaffordable payments if the loan has to be renewed multiple times.Ĭonsumers aren’t required to take any action to get the money. Those small-dollar loans come with expensive charges and short terms, usually 30 days or less, in which borrowers put up their vehicle as collateral. The CFPB also alleges that TitleMax doctored information about borrowers’ military status so they could provide these loans, even though lenders are prohibited by the Military Lending Act from making title loans to active duty troops or their dependents. The action includes other consumers who weren’t military borrowers, and neither the consent order nor CFPB officials could provide information about how much of the $5 million will go to military borrowers. The Consumer Financial Protection Bureau’s action requires TMX Finance LLC, widely known as TitleMax, to pay more than $5 million to consumers and a $10 million civil penalty to the CFPB. ![]()
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