Main Street Personal Finance, Inc., and two of its subsidiaries have settled with the Consumer Financial Protection Bureau over consumer financial protection violations.
Main Street, ACAC, Inc., which conducts business under the name Approved Cash Advance, and Quik Lend, Inc., have been ordered to pay $3.5 million in consumer redress. That amount will be suspended upon its payment of $2 million of the judgment and a $1 civil money penalty based on Approved Cash’s demonstrated inability to pay, the bureau said. The companies offer payday and auto-title loans in eight states.
The bureau found that Approved Cash provided deceptive finance charge disclosures in violation of the Consumer Financial Protection Act and the Truth in Lending Act, violated the CFPA and TILA by failing to refund overpayments on its loans, and violated the CFPA by engaging in unfair debt collection practices.
Specifically, Approved Cash violated the CFPA’s prohibition against engaging in deceptive acts or practices and TILA by concealing and understating the actual finance charges of its auto-title loans for 4,129 Mississippi consumers (representing approximately 6,524 loans) from Oct 1, 2016 to May 15, 2020. Consumers paid a total of more than $3.5 million more than the finance charge listed in disclosures for the loans, which are called auto-title pledge transactions under Mississippi state law.
Approved Cash also violated the CFPA’s prohibition against unfair acts or practices and TILA by retaining consumers’ overpayments on their loans for months and sometimes years instead of returning those funds to consumers, the agency said.
The bureau also found that Approved Cash engaged in unfair debt collection practices in violation of the CFPA when it made numerous calls to consumers’ workplaces, references, and other third parties after being asked to stop, and improperly disclosed consumers’ debts to third parties or used tactics that risked such disclosure.
The companies, which are based in Cleveland, Tenn., offer payday and auto-title loans and own and operate about 156 stores in eight different states: Alabama, Louisiana, Michigan, Mississippi, Oklahoma, South Carolina, Tennessee, and Virginia.
The consent order also prohibits Approved Cash from misrepresenting finance charges in its auto-title pledge transactions, requires it to ensure that consumers with credit balances over $1 are refunded timely, and prohibits it from engaging in the same unlawful debt collections practices.