If entered by the court, the proposed order would require FirstCash and 18 subsidiaries to set aside $5 million for redress, pay a $4 million fine to the CFPB’s victims relief fund and comply with the MLA, the CFPB said in a Friday press release.
In the CFPB’s lawsuit filed against FirstCash and its subsidiaries in November 2021, the agency alleged that the pawn store operator violated the MLA by making pawn loans to covered borrowers with interest rates that exceeded the law’s maximum allowable annual percentage rate of 36%, requiring arbitration in the case of a dispute, and failing to make all required loan disclosures, according to the release.
When the CFPB filed its lawsuit in November 2021, Rohit Chopra, who was the agency’s director at the time, said in a press release: “FirstCash is a repeat offender and cheated military families over and over again. FirstCash and Cash America West gouged military families and robbed them of their rights to go to court.”
FirstCash said in a Friday press release that as part of the settlement, it will offer a new pawn lending product for members of the U.S. military and their immediate families and dependents, who are covered by the MLA.
“We are pleased to have reached this agreement with the CFPB,” FirstCash CEO Rick Wessel said in the release. “While we disagree with the CFPB’s allegations regarding our military lending practices, we believe that agreeing to this settlement and putting this matter behind us is the best path forward for the Company. We remain committed to best meeting the needs of our customers, including members of the military and their families, and to continue providing excellent service.”
In another, separate report, the CFPB said in January that it would continue to protect servicemembers’ financial interests after finding that servicemembers pay more than civilian borrowers when taking out credit to buy a car and when buying add-on products like warranty, service and maintenance plans, and guaranteed asset protection (GAP) insurance products.
