Online loan lender Enova has agreed to pay $15 million to the Consumer Financial Protection Bureau’s (CFPB) victims relief fund to settle a series of charges, including withdrawing funds from consumer bank accounts without permission.
The CFPB also banned the lender from offering certain short-term consumer loans for seven years and required it to link executive compensation with legal compliance.
Enova extends or arranges unsecured installment loans and lines of credit to consumers in 37 states through its CashNetUSA- and NetCredit-branded subsidiaries. Until last year, the lender also extended unsecured payday loans to consumers through its subsidiaries.
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Ranning Li, president of Enova Consumer Lending, said in a statement that Enova takes any errors in its systems seriously, “especially those that impact our consumers, and (Enova) will continue to invest in our technology, systems and compliance processes to prevent, identify and ensure appropriate resolution of errors."
The CFPB, among other federal agencies, has been cracking down on the banking sector. Earlier this month it fined Citi $25.9 million in a discrimination case involving the denial of credit cards to Armenian American applicants.
In 2019, the CFPB fined Enova $3.2 million for debiting consumer bank accounts that it was not authorized to use and for failing to honor loan extensions it had granted to consumers.
“Enova decided to keep flouting the law after it was caught taking advantage of its consumers, and violated a law enforcement order,” said CFPB Director Rohit Chopra.
CFPB’s other charges against Enova include: the cancellation of loan extensions that were granted to consumers; failure to provide or misrepresenting the details of loan repayments, which ultimately led to extension cancellations; and failure to provide consumers with copies of signed authorizations detailing which bank accounts were approved for making repayments.
The CFPB wants to hear from you
If you have a problem with a loan or other financial products or services, the CFPB encourages you to file a complaint at its website or call (855) 411-CFPB (2372).
Editor's note: This headline was updated to reflect Enova is banned from certain short-term loans, not all.
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