One of the largest lenders in the US will have to pay a $15 million fine for “widespread illegal conduct”, including withdrawing money from customers’ bank accounts without their consent.
The Consumer Financial Protection Bureau (CFPB) says it is banning Chicago-based lender Enova from offering certain consumer loans after the company violated orders to change its deceptive practices.
The CFPB says Enova withdrew or attempted to withdraw funds from consumers’ bank accounts without obtaining their express informed consent. The lender also canceled loan extensions it had promised to consumers and misrepresented the due dates for loan payments.
Enova was fined $3.2 million in 2019 for similar issues, and CFPB Director Rohit Chopra says the company violated the agency’s orders to change its practices.
“Enova decided to continue ignoring the law after it was found abusing its customers and violating a law enforcement order.
“Today’s action imposes a $15 million fine, bans the company from certain activities and reforms executive compensation.”
Enova says the majority of the cases in question were self-reported to the CFPB, and the lender says it has already provided “appropriate compensation” to customers who were affected.
“While the errors identified in this settlement are similar to those addressed in the 2019 order, they do not arise from deliberate attempts to circumvent the law but are the result of unintentional computer and system errors.
However, with any complex system or process it is impossible to eliminate all errors. Since there is no established regulatory standard for satisfactory performance, any subsequent failures, no matter how rare or insubstantial, constitute a violation.”
Enova operates in 37 states through its CashNetUSA and NetCredit branded subsidiaries, offering unsecured installment loans and lines of credit.
The company says it has nine million customers and has funded $52 billion in loans.
Don’t miss a beat – Subscribe to receive email alerts straight to your inbox
Check price action
follow us on TweetFacebook and Telegram
Surf to the Daily Hodl mix
Generated image: Midjourney