In August 2016, the U.S. District Court for the Central District of California granted partial summary judgment to the Consumer Financial Protection Bureau (CFPB) in a federal lawsuit against a California-based online payday lender, its individual owner, its subsidiary, and a servicer of its loans (“Defendants”), where the CFPB alleged that Defendants used a “rent-a-tribe” scheme to avoid state usury and licensing laws in violation of the Consumer Financial Protection Act (CFPA).

But that ruling only established liability, and on January 19, 2018, the Court issued Findings of Fact and Conclusion of Law, ultimately awarding a statutory penalty of only $10 million—much lower than CFPB’s proposed $52 million. The Court awarded a lower-tier penalty because it found that the evidence did not show that Defendants knowingly violated the CFPA because when Defendants devised their plan, it was unclear as to whether liability would attach. The Court also concluded that the CFPB failed to present evidence sufficient to merit any restitution award, much less the CFPB’s proposed restitution amount of $236 million.