Cash America to Pay $19 Million Over Federal Consumer Claims
Cash America International Inc. (CSH), a Texas-based payday lender and pawn shop operator, will pay $19 million to settle U.S. Consumer Financial Protection Bureau complaints over its debt-collection practices and rates charged military service members.
The settlement announced by the consumer bureau in a statement today ends a probe, which the company disclosed in an Oct. 28 regulatory filing, that stemmed from alleged robo-signing of documents used in lawsuits filed by Cash America in Ohio. The bureau also accused the company of violating a federal law limiting interest rates on loans to members of the military and their families.
Cash America also destroyed documents even after it ordered an end to the practice, deleted calls it had recorded with consumers and directed employees to limit information they provided to federal supervisors, the agency said. The practices came to light in CFPB’s 2012 examination of the company.
“We are also sending a clear message today to all companies under our watch that impeding a CFPB exam by destroying documents, withholding records, and instructing employees to mislead examiners is unacceptable,” CFPB Director Richard Cordray said in an e-mailed statement.
The company will pay a $5 million civil penalty for its conduct, which occurred at various times between 2008 and 2013, and refund $8 million to consumers. Separate from those amounts, it has already reimbursed $6 million to consumers.
“Now that we have completed the initial CFPB review process and entered into this settlement, we will continue to focus on serving our customers while working to develop additional compliance programs as required by the CFPB,” Daniel R. Feehan, Fort Worth, Texas-based Cash America’s chief executive officer, said in an e-mailed statement.
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