The Consumer Financial Protection Bureau (CFPB) announced this week that it has filed an administrative lawsuit against defunct online lender Integrity Advance and its CEO for allegedly deceiving consumers about the cost of short-term loans.
Integrity Advance was a Delaware-based online lender which originated and serviced short-term, small-value, loans to consumers. The CFPB alleges that Integrity Advance violated the Truth in Lending Act and Electronic Fund Transfer Act by failing to disclose the cost consumers would pay under the default terms of the contract and remotely debiting consumers’ bank accounts even after consumers revoked authorization for withdraws. The CFPB also alleges the company violated the Dodd-Frank Act’s prohibition against unfair and deceptive acts and practices by hiding the true costs of loans; requiring repayment by pre-authorized fund transfers; and making automated withdraws without authorization.
The case will be heard in front of an Administrative Law Judge from the CFPB’s Office of Administrative Adjudication. According to the CFPB, “the Administrative Law Judge will hold hearings and make a recommended decision regarding the charges, which may be appealed to the Director of the CFPB for a final decision.”
The CFPB may make its Notice of Charges against Integrity Advance available online after November 28.