United States Licensed Lender Fined $15 Million
One of the largest licensed lenders in the United States 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 aimed to withdraw funds from consumers’ bank accounts without obtaining their express notified consent. The lender likewise 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 says the bulk of the issues were self-reported and that it has provided appropriate redress to influenced 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 likewise 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.
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