Bureau sues CA firm for violating Military Lending Act’s 36% rate cap, more

An injunction, damages, redress to consumers, disgorgement of ill-gotten gains, and the imposition of civil money penalties against LendUp Loans LLC are sought in a suit filed Friday by the Consumer Financial Protection Bureau (CFPB) over violations of a federal law protecting active-duty military servicemembers and dependents.

The bureau said Friday’s action was part of a broader sweep in the bureau of investigations of multiple lenders that may be violating the MLA.

The CFPB, in a suit filed in U.S. district court for the Northern District of California, alleges that LendUp, an online lender that offers single-payment and installment loans to consumers that is based in Oakland, Calif., violated the Military Lending Act (MLA) by extending loans with a “military annual percentage rate” (MAPR) that exceeds the statutory maximum of 36%, extending loans that require borrowers to submit to arbitration (prohibited under the MLA), and failing to make certain required loan disclosures, including a statement of the applicable MAPR.

The CFPB alleges that since October 2016, LendUp has made more than 4,100 single-payment or installment loans to more than 1,200 covered borrowers in violation of the MLA.

The CFPB is asking that the court, among other things, permanently enjoin LendUp from committing future violations of the MLA; order LendUp to correct inaccurate information furnished to consumer reporting agencies regarding amounts delinquent or currently owed; permanently enjoin LendUp from collecting debts arising from the agreements or from selling or assigning such debts; grant additional injunctive relief as the court deems just and proper; order LendUp to pay damages, restitution, and other monetary relief to consumers; impose a civil money penalty; award additional relief as appropriate.

CFPB lawsuit against LendUp