Let's kick off the new year with some good news on the CFPB enforcement front:
We've been following for a few months now the story of Virginia retail chains that take advantage of servicemembers' transience to trap them in a cycle of debt. (See here for my original discussion and here for a discussion of the CFPB's first enforcement action against one of the companies — a fine for misleading consumers.)
Now the CFPB has taken another, more significant enforcement action: it has settled a lawsuit against two of the companies (Freedom Furniture and Electronics and Military Credit Services) under terms that require the payment of millions of dollars in restitution and bar the companies from using Virginia courts to sue out-of-state consumers. Although a third company (USA Discounters, which was the target of the earlier fine) was not involved in this settlement, it appears to be softening its practices: as Pro Publica reports, "It still plans to file lawsuits in Virginia against out-of-state borrowers, but now will notify them that they can elect to be sued closer to home if they default on their payments."
Read the full Pro Publica story on the CFPB settlement here.