WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau (CFPB) announced a lawsuit Dec. 20 against Military Credit Services LLC (MCS) for allegedly making loans with improper disclosures.
MCS, a Virginia-based company, extends credit to consumers via nationwide retailers. Through a commonly owned company, it then collects owed debts. According to the CFPB, the company did not properly disclose the terms of pre-authorized transfers and interest rates on its loans. The CFPB argues that consumers cannot make informed decisions about their finances without these legally mandated disclosures.
The CFPB is taking action by using its authority under the Dodd-Frank Act, which allows the agency to pursue institutions for allegations of unfair, deceptive or abusive acts or practices. The CFPB ordered MCS to take steps to come under better compliance with federal laws, hire an independent consultant to review its practices, and pay a $200,000 penalty.
“Today’s action sends a clear message that lenders cannot ignore their responsibilities under the law,” CFPB Director Richard Cordray said. “This is the consumer bureau’s second action against Military Credit Services for improper disclosures. We are imposing further penalties, and we will continue to closely monitor their compliance in the future.”