PHILADELPHIA (Legal Newsline) - A lending company facing federal action by state officials continues to stand by its business practices as more states attack them - despite the federal government's own investigation finding no wrongdoing.
Mariner Finance was on the short end of a Pennsylvania federal court decision that granted state attorneys general like Pennsylvania's Michelle Henry the power to enforce the Consumer Financial Protection Act, which is usually enforced by the federal Consumer Financial Protection Bureau. The company claimed this would allow a small number of states to enforce federal law nationwide.
Four states and the District of Columbia initially sued Mariner over what they claim were illegal add-on products when offering personal loans. After Judge Kelly Hodge's January ruling, more states joined the case - Illinois, Indiana, New York, North Carolina, Tennessee and Wisconsin.
Though the case moved past Mariner's motion to dismiss, no decision has been reached on its merits. Mariner says the case makes the same claims that have been reviewed by "multiple agencies over the past six years, without a single finding of wrongdoing by any authoritative body."
"Mariner Finance has continuously disputed the claims throughout this exhaustive process and will continue to defend itself as an important provider of credit options to those who may have limited access to other sources of consumer credit," a company spokesperson said.
"Mariner has been and continues to be committed to compliance regarding all state and federal regulations, holding itself to a high standard of customer care."
Mariner says it has cooperated with investigations, providing information that shows its products are legal.
"The meritless allegations are based on minimal consumer interviews, the details of which were never shared with Mariner, and reflect a misunderstanding of the law, or simply a decision by the additional parties to disregard evidence which negates their claims."
Other state AGs and the Federal Trade Commission have closed probes without finding any illegalities on Mariner's part - "Even as additional parties have ignored the outcome of these investigations, a full and fair consideration of the facts at hand should lead to this matter being closed with no further action," the company said.
Mariner operates almost 500 branches in 28 states and offers customers who seek direct loans the option to purchase other products like insurance if the customer dies, becomes disabled or loses his or her job.
"None of the additional products offered to Mariner customers are novel or unusual," attorneys for the company wrote in its motion to dismiss in 2022.
"Mariner itemizes the cost associated with insurance products for its customers and expressly discloses that these products are optional... The fact that insurance products are optional and not required to obtain a loan is then re-emphasized throughout the paperwork for each insurance product."
Mariner pointed to a life insurance agreement that discloses it "is not compulsory, nor a condition precedent to any loan or credit transaction."