The Consumer Financial Protection Bureau today filed a proposed settlement with several payday lenders: NDG Financial Corp., E-Care Contact Centers, Ltd., Blizzard Interactive Corp., New World Consolidated Lending Corp., New World Lenders Corp., Payroll Loans First Lenders Corp., New World RRSP Lenders Corp., Northway Financial Corp., Ltd., and Northway Broker, Ltd., as well as several corporate officials.
The CFPB alleges that the defendants, all based in Canada and Malta, violated the Consumer Financial Protection Act "by misrepresenting to consumers in states where loans offered by the defendants violated state licensing or usury laws that they were obligated to repay loan amounts when such an obligation did not exist because state law voided the loan." The defendants also misrepresented that the loan agreements were not subject to United States federal or state law; misrepresented that non-payment of debt would result in lawsuits, arrests, imprisonment, or wage garnishment; and conditioned loan agreements upon irrevocable wage assignment clauses, which the Bureau alleges violated the Credit Practices Act.
Under the agreement, the defendants are permanently barred from advertising, marketing, promoting, offering, originating, servicing, or collecting any consumer loan issued to any consumer residing in the United States.
The defendants will pay no monetary penalty.