WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) filed individual lawsuits against five title lenders operating in Arizona for failing to disclose the annual percentage rate (APR) in online advertisements about auto-title loans. It is seeking civil monetary penalties and administrative orders requiring the companies to correct their practices.
Named in the suits were Auto Cash Leasing LLC, formed in 1999; Interstate Lending LLC, formed in 2005; Oasis Title Loans LLC, formed in 2013; Phoenix Title Loans LLC, formed in 2013; and Presto Auto Loans Inc., formed in 2002. All five lenders were formed in Arizona, operate in Arizona, and market their services to consumers online.
“From at least July 6, 2016, the CFPB alleges that the five lenders violated the Truth in Lending Act by advertising loan interest rates on their websites without advertising the corresponding annual percentage rate,” read the bureau’s announcement. “For example, one lender advertised on its website a monthly interest rate but failed to include the legally required annual percentage rate for the loan.”
The bureau said another lender asked consumers to take its advertised rate and multiple it by 12. However, it did not inform consumers that the calculated number is the annual percentage rate.
On Wednesday, the bureau filed a Notice of Charges that it had filed the lawsuits against the five title lenders. They will be tried by an administrative law judge from the bureau’s Office of Administrative Adjudication, an independent adjudicatory office within the bureau. The administrative law judge will hold hearings and make a recommended decision regarding the charges, and the director of the CFPB will issue a final decision, which may be appealed to a federal court.
Originally posted on F&I and Showroom