On April 27, 2017, the Consumer Financial Protection Bureau (“CFPB”) filed a complaint in a federal district court in Illinois against four online tribal-affiliated lenders alleging that the lenders violated the Truth in Lending Act (“TILA”), and engaged in unfair, deceptive, or abusive acts or practices (“UDAAP”). The CFPB is seeking injunctive relief and damages against the online lenders.
According to the CFPB, despite claiming affiliation with a tribe and originating loans under the federal tribal laws, the lenders originated loans that violated state licensing and usury laws. In particular, the CFPB claims that the lenders originated, serviced, and collected on loans that consumers were not obligated to repay because the loans did not comply with state licensing or state usury laws, and thus were void (or voidable) under the laws of at least 16 states, including Illinois, Massachusetts, New York, and Ohio.
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