Cash Express LLC is banned from operations after “making misleading representations to consumers” and withholding funds during check cashing transactions.
10/24/2018 13:00
The Bureau of Consumer Financial Protection and Cash Express LLC, a small-dollar lender based in Tennessee, reached a settlement Wednesday after the company reportedly violated the Consumer Financial Protection Act in “threatening collection letters,” according to a news release from the bureau.
The bureau’s consent order requires Cash Express to pay approximately $32,000 in restitution to consumers, and pay a $200,000 civil money penalty, according to the news release.
Cash Express offers high-cost, short-term loans, such as payday and title loans, as well as check-cashing services and owns and operates approximately 328 retail lending outlets in Kentucky, Alabama, Mississippi and Tennessee.
As described in the consent order, according to the news release, the BCFP found that Cash Express violated the Consumer Financial Protection Act (CFPA) by deceptively threatening in collection letters that it would take legal action against consumers, even though the debts were past the date for suing on legal claims, and it was not Cash Express’s practice to file lawsuits against these consumers. The bureau also found that Cash Express violated the CFPA by misrepresenting that it might report negative credit information to consumer reporting agencies for late or missed payments, when the company did not actually report this information.
The bureau also found that Cash Express violated the CFPA by withholding funds during check-cashing transactions to satisfy outstanding amounts on prior loans, without disclosing this practice to the consumer during the initiation of the transaction.
Under the terms of the consent order, according to the news release, Cash Express and its subsidiaries are barred from automatically taking money from check-cashing transactions unless certain conditions are met. Cash Express is further barred from making misrepresentations about its consumer reporting activities and its intention or likelihood of filing suit to collect a debt.
ACA International continues to support industry and law enforcement efforts to target these bad actors and eradicate them from the consumer financial marketplace. ACA has long led the effort to stop criminal debt collection activity and has worked consistently with the BCFP and other regulators to help them understand the complex issues that legitimate debt collectors and members of ACA face.
Read more on the settlement in the bureau’s consent order.