Education News Simulator Your Money Advisors Academy News Personal Finance News CFPB Sues ACE Cash Express and alleges that they concealed the existence of free Repayment Plans In addition, the agency claims in addition that the payday lending company illegally took customer money. By Ben Luthi The article was published on July 14, 2022. The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit Tuesday in the case against ACE Cash Express. The federal agency alleges that the payday lender has made over $240m or more in repayment fees for borrowers who could have been eligible for free plan of repayment. It also lied about the number of times it was attempting to debit charges from bank accounts belonging to borrower. Most important Takeaways The CFPB has been sued by payday lender ACE Cash Express for charging unconstitutional fees and committing illegal withdrawals from borrowers’ accounts. According to the Federal agency, the lending institution is a repeat offender, citing a 2016 enforcement effort that resulted in $10 million in penalties and Refunds to borrowers. The CFPB is seeking relief in the form of money for consumers including injunctive relief and civil penalty, and disgorgement compensation for unjust gains. The CFPB’s Lawsuit Against ACE Cash Express ACE Cash Express is a payday lender offering title loans that cash checks, bill payment and a host various other banking services.1 However, its handling of payday loans is what brought an action by the CFPB. The agency claims the lender has broken federal law. More specifically: Insuring free repayment plans In 10 states clients are entitled to the option of a free repayment plan each year. They are able to pay four equal installments instead of one lump sum. This comes with no interest or fees. Instead of making the borrowers aware about this option, ACE Cash Express told they had only two options: granted a grace period of a few days or a refinance based on fees. The CFPB claims that the lender has produced at most $240 million in fees from these borrowers since 2014. The illegal withdrawal of money: In many states, payday loan contracts state that the lender can attempt to withdraw the repayment up to three times. However, the CFPB alleges the following: ACE Cash Express has made an unauthorized fourth withdrawal at minimum 3,000 times in 2016 and resulted in $1.3 million that was illegally debited. 2 The CFPB will also note an enforcement action it took against ACE Cash Express in 2014, which compelled the payday lender not to force borrower into debt cycle as well as other unlawful debt collection practices.3 The lender said in a press statement that the lawsuit is nonsensical, claiming that incorrect withdrawals only affected 0.028% of borrowers and that more than 140,000 borrowers have utilized the option of a payment plan making this evidence that consumers already know of the option.4 Sponsored Reliable, Simple, Innovative CFD Trading Platform Are you looking for a dependable CFD trading software? With Germany’s No. 1 CFD Provider (Investment Trends in 2022), Plus500 is a CFD licensed provider whose platform has been secured by SSL. 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How it works, How to Get One, and legality A payday loan is a type of borrowing that’s short-term and where a lender extends credit at a high rate by calculating your income. more Student Debt Definition Student debt is the term used to describe loans to cover the tuition fees at college that become due once the student is finished or leaves school. More Regulation B (Reg B) in the Equal Credit Opportunity Act (ECOA) Regulation B sets out the rules that lenders must follow when processing credit information. more Consumer Financial Protection Act The Consumer Financial Protection Act of 2010 established the Consumer Financial Protection Bureau (CFPB). more What is what is the Equal Credit Opportunity Act (ECOA)? Scope The Equal Credit Opportunity Act (ECOA) is a federal civil rights statute that prohibits lenders to deny the credit of a prospective applicant by reason of any other reason not directly related to the applicant’s capacity to pay back. 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