On May 30, the CFPB and a national pawn store operator filed a joint status report in the U.S. District Court for the Northern District of Texas announcing that they have reached an agreement to resolve a 2021 Bureau lawsuit alleging violations of the Military Lending Act (MLA) and a 2013 CFPB consent order. The suit alleged that the pawn store operator and its subsidiary issued thousands of high-interest loans to active-duty servicemembers and their families in violation of federal law.

In its complaint, the CFPB alleges that the company:

While the exact terms of the new settlement have not yet been disclosed, the CFPB had previously sought injunctive relief, rescission of void contracts, consumer redress, civil money penalties, and corrections to consumer credit reports.

Putting It Into Practice: Although the Bureau has scaled back certain enforcement actions in recent months, enforcement of MLA violations continues to be a priority for the current administration (previously discussed here and here). Lenders offering consumer credit to servicemembers should continue to review and strengthen their MLA compliance protocols to ensure compliance.

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