CFPB Deals With Company And CEO For Fraudulent Deposits And Loan Products | Weiner Brodsky Kider PC

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The U.S. District Court for the Southern District of Florida recently approved Provided final decision and order solve CFPB problems accusations that the company and its CEO, in violation of the Consumer Financial Protection Act (CFPA), misrepresented the annual interest rate associated with loans to borrowers and the risks associated with deposits used to fund those loans.

The company is a limited liability company based in Florida. The CFPB claimed that since 2017, the company has offered high-interest, short-term loans to drivers who have worked with car-sharing companies. The company told borrowers that the annual interest rate on these loans was 440%, when in fact the annual interest rate ranged from 975% to 978%. In June 2020, the company began accepting deposits from consumers to fund driver loans. The company falsely reported that deposits had a guaranteed return of 15% per annum, were comparable to bank savings products, and were FDIC insured up to $ 500,000. In addition, the loans were bad under the Florida Usury Act, which capped interest rates at 45% per annum. The company also misrepresented the rate at which new customers were depositing funds.

By the Subject to the Final Judgment and Order, the company and its CEO are permanently prohibited from engaging in deposit activities and from collecting, selling or transferring any rights to loans. The company and its CEO are also required to pay $ 100,000 in civil fines and approximately $ 1 million in consumer restitution.

The company and its CEO neither acknowledge nor deny the CFPB’s allegations.

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