CFPB Settles With LendUp Loans For Military Lending Act Violations
The CFPB's complaint alleged that since October 2016, LendUp made over 4,000 single-payment or installment loans to over 1,200 covered borrowers in violation of the MLA.
The Consumer Financial Protection Bureau is settling with LendUp Loans for a Dec. 04, 2020 lawsuit, which alleged that the company violated the Military Lending Act. If the proposed settlement is entered by the court, LendUp will be required to provide $300,000 in redress to consumers and pay a $950,000 civil money penalty, according to a press release.
"The settlement would also enjoin LendUp from committing future violations of the MLA and from collecting on, selling, or assigning any debts arising from loans that failed to comply with the MLA," according to the CFPB. "It would also require LendUp to correct or update the information it provided to consumer reporting agencies about affected consumers."
According to the CFPB, the MLA puts in place protections in connection with extensions of consumer credit for active-duty service members and their dependents, who are defined as “covered borrowers.” The CFPB also noted that the protections include a maximum allowable annual percentage rate of 36%, known as a Military Annual Percentage Rate (MAPR), a prohibition against required arbitration, and certain mandatory loan disclosures.
The CFPB's complaint alleged that since October 2016, LendUp made over 4,000 single-payment or installment loans to over 1,200 covered borrowers in violation of the MLA.
"The Bureau specifically alleged that LendUp’s violations of the MLA included extending loans with an MAPR that exceeds the MLA’s 36% cap, extending loans that require borrowers to submit to arbitration, and failing to make certain required loan disclosures, including a statement of the applicable MAPR," according to the press release.