Head of CFPB Won’t Sue in Payday Loan Collector Case
- March 29, 2018
- Posted by: Mike Brown
- Category: Personal Loan News
CFPB Director Mick Mulvaney will not pursue a lawsuit against a payday loan collector.
Mick Mulvaney, who serves as interim head of the Consumer Financial Protection Bureau (CFPB), has opted not to pursue a lawsuit against a payday loan collector, CNBC reported. He is also deciding whether he’ll move ahead with possible lawsuits involved three other payday lenders. Mulvaney was appointed to his position by President Donald Trump.
Why Are These Cases Important?
Mulvaney is still new at his job as interim head, having been named to the position after Richard Cordray, former head of the CFPB, resigned in November 2017. The purpose of the CFPB, which was first formed in 2010, is to stop abusive lending practices affecting consumers.
Cordray was ready to move ahead with a lawsuit against National Credit Adjusters, which is headquartered in Kansas before he announced his resignation. That company is a debt collector for online lending companies that work on tribal lands.
Those lenders get away with charging sometimes exorbitant rates of interest that aren’t allowed in most states. But because the loans are made on tribal lands, which are semi-autonomous, the companies say those types of loans and their high-interest rates are permissible.
When Cordray was head of the CFPB, he argued National Credit Adjusters did not have the authority to collect those loans, regardless of where they originated.
But Mulvaney hasn’t displayed the same conviction about taking the case to trial. He dropped it recently, and a lawyer for National Credit Adjusters, Sarah Auchterlonie, said the case won’t be revived.
According to figures uncovered by the CFPB, National Credit Adjusters mistakenly collected about $50 million, and approximately $45 million of that was slated to be returned, according to unnamed sources in the CNBC article.
And during its attempts to collect money, borrowers alleged they were intimidated with the possibility of jail and lawsuits. The other cases currently being looked at by Mulvaney involves the companies Security Finance, Triton Management Group, and Cash Express.
What Recourse Do Borrowers Have When Having Issues with a Lender?
The first action a borrower should take if they feel a lender or an employee of a lending company is behaving unlawfully or has faulty recordkeeping is to contact a manager at the company itself. If the employee you are speaking with refuses to put you in touch with a manager, call back and ask to directly speak with a manager.
If the matter isn’t settled after speaking with a manager, outside agencies should be considered. The CFPB is one option as it has processed more than one million consumer complaints. According to its website, the CFPB has helped 97 percent of those who have lodged complaints get a response in 15 days or less.
This agency will take complaints about most types of lenders, including banks, mortgage companies, credit reporting companies, auto lenders, student loans, and consumer loans, including payday loans. But it will also take complaints about prepaid cards, credit cards, debt collection, and money transfers. It is one of the agencies in recent years that has handled a large number of consumer complaints, so can be a good resource to begin with.
Image Copyright © Gage Skidmore