CFPB Files Complaint Against Pension-Advance Lender

On September 13, 2018,theConsumer Financial Protection Bureau (“CFPB”)announcedthat it filed acomplaintagainst a lender, its president, and related entities (“Defendants”) for allegedly making small-dollar loans in exchange for borrowers’ monthly pension payments, which the CFPB alleges is a violation of the Consumer Financial Protection Act, 12 U.S.C. § 5536(a)(1)(B). The Complaint alleges thatDefendants misrepresented that the pension-advance products they offeredwere not loans and misrepresented that the products were notsubject to interest rates. The CFPB’s complaint follows in the footsteps of several state agencies that havesimilarly filed lawsuits concerning the marketing of pension-advance products.(See, for example, Enforcement Watch postshere,here, andhere.) The complaint also alleges violations of the Truth in Lending Act (TILA), 15 U.S.C. § 1638(a)-(b), due to Defendants’ failing to clearly disclose the annual percentage rate of the loans. The complaint seeks an injunction, disgorgement, civil penalties, and enforcement costs.