McCune Davis urges Legislature, Attorney General Tom Horne and Congressman David Schweikert to do more to protect consumers from predatory companies
Calls out Cash America, fined by CFPB, for funding attempts to block further regulation
STATE CAPITOL, PHOENIX – Rep. Debbie McCune Davis, D-Phoenix (District 30), said Arizona needs to step up its consumer protections after the Consumer Financial Protection Bureau announced it is requiring payday lender Cash America International to refund $14 million to consumers nationwide and pay a $5 million fine for overcharging military members and robo-signing court documents.
According to the CFPB, the company was robo-signing court documents in debt collection lawsuits. This is a process that involves having papers signed without review. The CFPB also reported that the company violated the Military Lending Act by charging service members and their families an annual interest rate higher than 36 percent on some loans. Arizona has not enacted a Military Lending Act enforcement statute as anticipated by the federal law.
“This is the first action against a payday lender that the CFPB has taken, and as a result, Cash America will have to reimburse approximately 14,000 people for robo-signing court documents involved in debt collection lawsuits. This is good news for consumers. Cash America operates in Arizona as SuperPawn offering collateral and auto title loans. The Military Lending Act also protects consumers from pawnshops.
“We have to do more in Arizona. My colleagues and Arizona Attorney General Tom Horne must support efforts to implement the Military Lending Act in the 2014 legislative session. I will introduce legislation that will enforce best practices that promote military consumer protection. If Arizona is serious about protecting service members and their families from harmful credit practices now is the time to act on this issue.
“I am also calling on Arizona Congressman David Schweikert to disassociate from Consumers for Choice – an organization funded by Cash America that is actively working to block the regulation of predatory lending. The congressman is featured on the organization’s website, consumersforchoice.org. Rep. Schweikert should be doing more to protect Arizonans and should be supporting the regulators who have the authority to stop predatory practices.”
McCune Davis added she agrees with the congressional testimony CFPB Assistant Director Hollister K. Petraeus gave on Nov. 20.
“Assistant Director Petraeus said we should be ‘indignant when we hear of service members trapped in outrageous loans.’ She also said we have an obligation to ‘do the best possible job of crafting rules that properly implement the intent of the Military Lending Act.’ She is right, and we should keep that in mind going forward.”
McCune Davis praised the CFPB for providing consumers a place to go when they have complaints regarding consumer credit cards, mortgages, bank accounts and services, private student loans, consumer loans, credit reporting and money transfers.
“The CFPB is empowering people to be watchdogs and providing them the tools to report predatory practices as soon as they see them. This will help Arizonans be better able to protect themselves and get restitution when they have been victimized.”
For information on refund eligibility, go to http://www.consumerfinance.gov/blog/our-first-enforcement-action-against-a-payday-lender/.