The Consumer Financial Protection Bureau today sued Military Credit Services, LLC $200,000 for making loans with “improper disclosures”.
This is the CFPB’s second enforcement action against MCS. In 2014, the CFPB, along with the states of North Carolina and Virginia, sued the company for using illegal tactics to attempt to collect debts. The company was ordered to pay $2.5 million in customer restitution and a $100,000 as well as to revise its contract disclosures in 2015.
Military Credit Services is a Virginia-based company that extends credit to consumers through retailers nationwide and, through a commonly owned company, collects debts owed under the credit contracts. The CFPB found the company violated federal law by failing to properly disclose the terms of preauthorized transfers and interest rates on the loans it offered.
As well as paying the fine and correcting its disclosure forms, MCS must hire an independent consultant with specialized experience in consumer-finance compliance to conduct an independent review of the company’s issuance and servicing of credit. The resulting report will go to both MCS and the CFPB.
“Today’s action sends a clear message that lenders cannot ignore their responsibilities under the law,” said CFPB Director Richard Cordray. “This is the Consumer Bureau’s second action against Military Credit Services for improper disclosures. We are imposing further penalties, and we will continue to closely monitor their compliance in the future.”