RSSThe Consumer Financial Protection Bureau recently reached a $9 million settlement in its 2021 lawsuit against pawn shop company FirstCash Inc.
The settlement, announced July 11, requires the Delaware-based company to “set aside $5 million” for impacted servicemembers and their family members and pay a $4 million fine to the CFPB victims relief fund.
Under the agreement, FirstCash will also either have to offer a compliant loan product to servicemembers and their families or follow a regulatory safe harbor intended to screen for borrowers protected under the Military Lending Act. The law, implemented by the Department of Defense, was enacted in 2006 and is intended to protect active duty military members.
Filed in the fall of 2021, the lawsuit claimed FirstCash and 19 subsidiaries violated the law by making pawn loans to borrowers exceeding its maximum annual percentage rate of 36 percent. The company also allegedly violated the Military Lending Act by requiring arbitration when there is a dispute and by not making all required loan disclosures.
FirstCash owns and operates more than 1,000 retail pawnshops across the country.
