Bureau Settles Payday Lending Case
Friday, August 17, 2018 8:55 AM

The CFPB/BCFP announced on Friday that a federal court had entered an order approving a settlement between the Bureau and Richard Moseley Sr., Richard Moseley Jr., and 20 interrelated corporate entities (Hydra Group) controlled by the Moseleys, in a lawsuit for the unlawful origination and servicing of short-term, small-dollar online loans to consumer across the country. The suit alleged violations of the Consumer Financial Protection Act and other federal consumer protection laws. The Bureau claimed the defendants obtained consumers' personal and financial information from third-party data brokers and used that information to access consumers' bank accounts without authorization; then, the Hydra Group (as the deposited loans in consumers' bank accounts, then debited biweekly "finance charges" indefinitely. The Bureau also alleged that any written disclosures consumers received, the price terms and repayment obligations of the "loans" were misrepresented.

Under the consent order, the defendants will be banned from the industry, forfeit approximately $14 million in assets, and pay a $1 civil money penalty (based on the defendant's limited ability to pay. A judgment of $69 million was ordered for redress payments but was suspended upon compliance with other requirements of the order.

Source:  BCFP