A firm and its six subsidiaries that were affiliated with tribal lenders and was allegedly involved in the provision and collection on loans that violated interest rate caps and other state law requirements would pay aggregate civil money penalties of $7 under a proposed settlement announced Wednesday by the federal agency charged with consumer financial protection.
The settlement between the Consumer Financial Protection Bureau (CFPB) and Think Finance, LLC (formerly known as Think Finance, Inc.) and its subsidiaries would resolve a suit originally filed by the bureau in November 2017, the same year Think Finance sought bankruptcy protection. The CFPB alleged then that the Think Finance entities engaged in unfair, deceptive, and abusive acts and practices (UDAAP) in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.
The bureau’s 2018 amended complaint (filed in district court in Montana) alleged that the Think Finance entities operated as a common enterprise that affiliated with tribal lenders in the offering and collection of online installment loans and online lines of credit to consumers nationwide, the CFPB explained in Wednesday’s release. It said these entities made deceptive demands and illegally took money from consumers’ bank accounts for debts that consumers did not actually owe because the loans were either partially or completely void under state law. The bureau also alleged that the Think Finance entities provided substantial assistance to two debt collection companies that were also engaged in the illegal collection of loans.
The CFPB said that, if entered by the court, the proposed stipulated final consent order would, among other things:
- prohibit the Think Finance entities from offering or collecting on loans to consumers in any of the 17 states if the loan violates state lending laws and assisting others in engaging in that conduct; and
- impose a $1 civil money penalty for each of the seven Think Finance entities.
The CFPB also said this proposed consent order is a component of the global resolution of the Think Finance entities’ bankruptcy proceeding in the Bankruptcy Court for the Northern District of Texas, which includes settlements with the Pennsylvania Attorney General’s Office and private litigants in a nationwide consumer class action. “Consumer redress will be disbursed from a fund created as part of the global resolution, which is anticipated to have over $39 million for distribution to consumers and may increase over time as a result of ongoing, related litigation and settlements,” the bureau stated.