CFPB Defends Troops Against Predatory Lenders
By Consumers Union on Wednesday, July 30th, 2014
More proof that the CFPB is standing up for consumers: the CFPB has permanently stopped a lender that has been preying on soldiers and trying to evade regulators for years.
The CFPB, along with 13 state attorneys general, took action against Colfax Capital Corporation and Culver Capital LLC, together called “Rome Finance,” for tricking servicemembers and other consumers into signing up for expensive loans. Rome Finance targeted soldiers especially by setting up kiosks close to military bases.
Rome Finance offered loans for electronics like computers and televisions. They drew in buyers by advertising no down payment and “instant financing,” but then unfairly boosted the price of the electronics to cover the financing charges.
Rome Finance has been taking advantage of troops since at least 2005, and has been reprimanded by regulators more than once. The CFPB demanded that Rome Finance stop collecting on $92 million of debt and has permanently barred them from lending to consumers. While it has not yet been decided, victims of Rome Finance may also qualify for relief provided by the Civil Penalty Fund.
Unfortunately, lenders commonly try to take advantage of soldiers, many of whom are vulnerable because they’re young and on their own for the first time. Luckily, the CFPB is stepping in. Take a look at this video story from a soldier, Ari, and his father, Harry, who sought the CFPB’s help when Ari was trapped in a car loan that he couldn’t afford. Ari says in the video, “The fact that the CFPB took action in the name of servicemembers across the entire country and the world, I think really shows us that someone’s in our corner.”
That’s why we’re concerned that some members of Congress want to shut the CFPB down by introducing a number of bills that would hinder its work. Click here to learn more about these bills, and please send a message to Congress that you want to protect the CFPB!
If you or one of your family members has been the victim of predatory lenders, we’d like to hear the details — please click here to share your story!