CFPB announces enforcement actions against auto title lenders

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The CFPB announced that it has filed administrative enforcement actions against five Arizona auto title lenders for alleged violations of Truth in Lending Act advertising requirements.  According to the CFPB, the lenders violated TILA by advertising a periodic interest rate for their loans on their websites without advertising a corresponding annual percentage rate.  As examples, the CFPB alleges that one lender advertised a monthly interest rate but did not include the APR and another lender asked consumers to take its advertised rate and multiply it by 12 without informing consumers that the resulting number was the APR.

In its press release, the CFPB states that its Rules of Practice for Adjudication Proceedings allow it to publish the Notice of Charges ten days after the company is served and, if allowed by the hearing officer, to publish the charges on its website.

In June 2016, the CFPB issued its proposed payday lending rule which, in addition to payday loans, covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  Comments on the proposal are due by October 7, 2016.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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