US Licensed Lender Fined $15 Million
One of the largest licensed lenders in the US will pay a $15 million fine for “widespread illegal conduct,” including withdrawing funds from customers’ bank accounts without their consent. The Consumer Financial Protection Bureau (CFPB) is banning the Chicago-based lender Enova from offering certain consumer loans after violating orders to change its deceptive practices.
Enova withdrew or attempted to withdraw funds from consumers’ bank accounts without obtaining their express informed consent. The lender also canceled promised loan extensions and misrepresented due dates for loan payments. CFPB director Rohit Chopra says the company violated the agency’s orders to change its ways after a $3.2 million fine in 2019.
Enova’s Response
Enova says the majority of the issues were self-reported and that it has provided appropriate redress to affected customers. The firm operates in 37 states through its CashNetUSA and NetCredit subsidiaries, offering unsecured installment loans and lines of credit. Enova has nine million customers and has funded $52 billion in loans.
Hot Take: Enova’s Penalties and Reforms
Enova’s decision to keep flouting the law led to a $15 million penalty and bans the company from certain lines of business. The firm also has to reform executive compensation. Enova says that subsequent errors were a result of unintended computer and system errors and not from deliberate attempts to avoid the law.
By
By
By
By