The Consumer Financial Protection Bureau announced a settlement with Cash Express, LLC, a small-dollar lender that offers high-cost, short-term loans as well as check-cashing services.
The CFPB found that Cookeville, Tenn.-based Cash Express violated the Consumer Financial Protection Act 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.
Cash Express also 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. Additionally, the company violated the CFPA by abusively 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, Cash Express and its subsidiaries are barred from automatically taking money from check-cashing transactions unless certain conditions are met. The company is also barred from making misrepresentations about its consumer reporting activities and its intention or likelihood of filing suit to collect a debt.
The order requires Cash Express to pay approximately $32,000 in restitution to consumers and pay a $200,000 civil money penalty.
Cash Express owns and operates approximately 328 retail lending outlets in four states: Tennessee, Kentucky, Alabama, and Mississippi.