WASHINGTON (Legal Newsline) — The Consumer Financial Protection Bureau (CFPB) announced April 26 that it has ordered Security National Automotive Acceptance Company (SNAAC), an auto lender specializing in loans to service members, to pay $1.25 million and make good on a previous consent order after the company allegedly violated a CFPB consent order.
The CFPB had ordered SNAAC to pay both redress and a civil penalty to resolve allegations of illegal debt collection practices. SNAAC had purportedly made threats to service members about their debts, stating that it would contact commanding officers. Additionally, SNAAC allegedly exaggerated the amount of debt each service member owed.
According to the CFPB, SNAAC failed to provide more than $1 million in owed refunds. This inaction on the part of SNAAC affected more than 1,000 consumers.
"This company violated a bureau order when it failed to get money back to service members it had hounded with illegal debt collection tactics,” said CFPB Director Richard Cordray. "We are making sure this company finally rights its wrongs."
The CFPB is authorized to take action against financial institutions under power from the Dodd-Frank Wall Street Reform Act.
SNAAC issued the following statement:
"The settlement resolves a disagreement between SNAAC and the CFPB over the interpretation of part of a Consent Order issued by the Bureau in October 2015. SNAAC agreed to this settlement to close this matter and move forward in serving customers in the respectful, honorable manner that has been the company’s tradition.
"The CFPB acknowledges in the settlement agreement that 'SNAAC has consented' to the order 'without admitting' to its findings. The original Consent Order covered approximately 2,200 of the more than 83,000 accounts serviced by SNAAC between 2011 and 2015. At issue in this disagreement was the application of credits provided to a fraction of those accounts that had already benefited from a settlement balance for substantially less than was owed.
"Although SNAAC disagreed with the CFPB’s interpretation of the 2015 Consent Order, the company offered to pay all the disputed amounts in order to move forward. The CFPB declined the offer and began an inquiry. SNAAC fully cooperated and responded quickly to all requests for data, reports and testimony.
"SNAAC is proud of its work over the past 30 years for its customers, many of whom would not have had access to the credit they and their families need."