On December 16, the Consumer Financial Protection Bureau executed a consent order with Moneytree, Inc., whereby Moneytree was required to pay $255,000 in redress and an additional $250,000 in civil monetary penalties arising out of the Bureau’s allegations that Moneytree violated the Consumer Financial Protection Act (“CFPA”) and the Electronic Funds Transfer Act (“EFTA”). According to the consent order, Moneytree violated the CFPA by running an online advertisement campaign in which the lender advertised that it would cash customers’ case refund checks for “1.99.” According to the Bureau, customers believed that Moneytree would charge them a flat fee of $1.99, but the customers instead were charged 1.99% of the amount of the check. The consent order also states that Moneytree violated the CFPA by sending letters to unsecured borrowers, stating that the loans were secured by their vehicle titles. Although Moneytree corrected this error, the Bureau stated that the letters caused borrowers to mistakenly believed that their vehicles were about to be repossessed.
The consent order states that Moneytree violated the EFTA by, during a two-week period, executing 729 agreements with customers without language authorizing Moneytree to debit loan repayments from the customers’ accounts and nonetheless making the debits.
Moneytree did not admit or deny the allegations of the consent order.
This consent order is instructive to lenders and payment processors to make sure that the ACH withdrawal agreements comply with the EFTA.