The CFPB announced that it filed a lawsuit in a Virginia federal district court against B&B Pawnbrokers, Inc., for alleged violations of the Truth in Lending Act and the Consumer Financial Protection Act in connection with closed-end consumer loans made by the company.  While the complaint only describes the loans as closed-end loans secured by personal property, the CFPB’s press release describes the loans as “pawn and auto title loans.”

According to the CFPB’s complaint, the company charged a “finance charge,” “storage fee,” and “processing fee” but did not include the storage fee or processing fee in the finance charge, which also resulted in an inaccurate disclosure of the annual percentage rate in violation of TILA and Regulation Z.  The complaint also alleges that the company’s disclosures violated TILA and Regulation Z by failing to include the brief descriptions of the finance charge and APR required by TILA and Regulation Z.  (For example, Regulation Z requires the term “APR” to be described as “the cost of your credit as a yearly rate.”)

The CFPB alleges in the complaint that the alleged TILA and Regulation Z violations constitute violations of the CFPA.  The CFPB cites to 12 U.S.C. Section 5536(a)(1)(A) which provides that it is unlawful for “any covered person…to offer or provide to a consumer any financial product or service not in conformity with Federal consumer financial law, or otherwise commit any act or omission in violation of a Federal consumer financial law.”  The complaint alleges that the company’s inaccurately disclosed the APR on most of its contracts from “at least January 1, 2013 through at least September 2015.”  The CFPB may have included the CFPA claim to try to take advantage of the CFPA’s three-year statute of limitations.

In the complaint, the CFPB seeks unspecified monetary relief, injunctive relief, and penalties.