The federal financial consumer protection agency has proposed $300,000 in consumer redress and a $950,000 civil money penalty assessment against the Oakland, Calif.-based LendUp Loans LLC, which the bureau alleges violated the Military Lending Act’s protections for military servicemembers.
The proposed stipulated final judgment and order, announced Thursday by the Consumer Financial Protection Bureau (CFPB), would also enjoin LendUp from committing future violations of the MLA and from collecting on, selling, or assigning any debts arising from loans that failed to comply with the MLA; and require the firm to correct or update the information it provided to consumer reporting agencies about affected consumers.
The bureau’s lawsuit, filed last month in the U.S. District Court for the Northern District of California, alleged that LendUp since October 2016 made more than 4,000 single-payment or installment loans to more than 1,200 covered borrowers in violation of the MLA. Violations, it said, included extending loans with a military annual percentage rate (MAPR) that exceeds the MLA’s 36% cap, extending loans that require borrowers to submit to arbitration, and failing to make certain required loan disclosures, including a statement of the applicable MAPR.
The bureau on Thursday said this action is the first resolution in the bureau’s broader sweep of investigations of multiple lenders that may be violating the MLA.
RR: Bureau sues CA firm for violating Military Lending Act’s 36% rate cap, more (Dec. 4, 2020)