CFPB Arrests Online Lenders, Payday Loan Providers on High Alert

The ongoing struggle between payday money lenders who provide services like payday loan and the Consumer Financial Protection Bureau has been widely publicized. People have not taken the proposed abolishment of helpful services like fast cash or car title loans.

The Consumer Financial Protection Bureau (CFPB) recently acted against four online payday lenders. They were-

  • Silver Cloud Financial, Inc.
  • Mountain Summit Financial, Inc.
  • Golden Valley Lending, Inc. and
  • Majestic Lake Financial, Inc.

These four online payday money lenders were charged for misleading customers by gathering debt they were not lawfully due. In a suit registered in federal court, the Consumer Financial Protection Bureau alleged that the four online payday money lenders could not lawfully collect on these arrears because the advances were annulled under state laws overriding caps of the rates of interest or the licensing of money lenders. The Consumer Financial Protection Bureau alleged that the money lenders made misleading demands and unlawfully took cash from customer bank accounts for ‘sum unpaid’ that customers did not lawfully owe. The Consumer Financial Protection Bureau pursues to stop the illegal practices, recover compensation for hurt customers, and levy a penalty.

Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. are online payday money lenders and loans and advance providing companies located in Upper Lake, California. Since the year of 2012, Golden Valley Lending and Silver Cloud Financial have made accessible online advances of $300 to $1,200 with yearly rates of interest that ranged from 440% up to 950%. Mountain Summit Financial and Majestic Lake Financial started offering comparable advances more recently.

The Consumer Financial Protection Bureau’s examination exposed that the high-cost advances dishonored licensing necessities or caps of rates of interest – or in some cases both. This made the advances annulled in its entirety or in part in around seventeen states:

  • Arizona
  • Arkansas
  • Colorado
  • Connecticut
  • Illinois
  • Indiana
  • Kentucky
  • Massachusetts
  • Minnesota
  • Montana
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Ohio
  • South Dakota

The Consumer Financial Protection Bureau alleged that the four online payday money lenders were collecting cash that customers did not lawfully owe. The Consumer Financial Protection Bureau’s suit alleged that Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial dishonored these acts:

The Precise Accusations Include:

Deceiving customers about loan expenses that were not legally payable: The money lenders chased customers for payments even supposing the advances in question were annulled completely partly under state regulation and the collection of these payments were not authorized.

Collection of credit payments which customers were not obligated to pay: The four, online pay day money lending corporations made electronic extractions from customers’ bank accounts or phoned or delivered letters to customers asking for payment for arrears that customers were not legally responsible to pay.

Failure to reveal the actual cost of credit: The money lenders’ web pages did not reveal the yearly rates of the percentage that were applied to the advances. When communicated by potential borrowers, the representatives of the money lenders did not inform customers the yearly rates of the percentage that would be applied to the loans.

Not every payday money lender, however, practices illegally like those four. The Consumer Financial Protection Bureau has in the past, notoriously tried to pigeon hole all payday money lenders into the same bracket, doing their best to eradicate helpful financial products like the payday loan. The public however still are not convinced that these alternative banking institutes are the real cause of their problems.

Luann Abel posted at 2017-11-14 Category: Payday Advance

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