john-zasada-doeren-mayhew-cpas
John Zasada, Compliance Consulting Director, Financial Institutions Group

On June 2, 2020, the Consumer Financial Protection Bureau (CFPB) announced a consent order with Main Street Personal Finance (Main Street) and its subsidiaries for Truth in Lending Act (TIL) and Unfair and Deceptive Acts or Practices (UDAAP) violations. Main Street operates 156 stores offering payday loans, title loans and check cashing. The 28-page consent order details how Main Street engaged in deceptive acts or practices and violated TIL by understating finance charges on auto-title loans. Consumers paid over $3.5 million more than the finance charge listed on the initial TIL disclosures. Main Street also engaged in unfair acts and violated TIL by retaining for months or even years consumers’ overpayment on loans instead of returning the funds to consumers.

Main Street made numerous calls to consumers’ workplaces, references and third parties after being asked to stop. It also improperly disclosed consumers’ debts to third parties. The CFPB deemed these practices unfair.

Due to its lack of financial resources, Main Street was ordered to pay a civil money penalty of only $1. A judgment for monetary relief was also assessed against Main Street for $3,540,517.10. Based on the inability of Main Street to pay this amount, it was ordered to pay $2 million.

To gain assistance with your institution’s TIL and UDAAP practices, contact Doeren Mayhew’s regulatory compliance specialists today.