US Lending Giant Hit With $15M Penalty Over Misleading Practices
Enova, a prominent lending institution based in Chicago, faces a substantial fine of $15 million following allegations of widespread illegal actions, including unauthorized withdrawals from customers’ bank accounts.
The Consumer Financial Protection Bureau (CFPB) has taken action against Enova, barring the company from offering specific consumer loans due to its failure to address misleading practices.
The CFPB’s investigation uncovered instances where Enova withdrew or attempted to withdraw funds from customers’ bank accounts without obtaining proper consent. Furthermore, the lender failed to honor commitments made to customers regarding loan extensions and misrepresented deadlines for loan repayments.
This isn’t the first time Enova has been in hot water. In 2019, the company was fined $3.2 million for similar issues. Despite facing prior penalties, Enova allegedly continued its unlawful behavior, drawing condemnation from Rohit Chopra, Director of the CFPB.
Enova’s repeated violations of law enforcement orders demonstrate a disregard for legal obligations, as they persisted in exploiting customers even after facing consequences. The imposed penalty of $15 million is accompanied by restrictions on their business operations and revisions to executive compensation.
Enova has acknowledged that most of the reported issues were self-disclosed to the CFPB. The company asserts that it has already taken steps to compensate affected customers for the errors.
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While Enova acknowledges similarities between the current settlement and the 2019 order, they attribute these errors to unintended computer glitches rather than intentional evasion of the law. Emphasizing the complexity of their systems and the absence of defined regulatory standards for flawless performance, Enova suggests that even minor or infrequent subsequent errors are considered violations.
Operating across 37 states through its CashNetUSA and NetCredit brands, Enova offers unsecured installment loans and lines of credit. The company boasts a customer base of nine million and claims to have provided $52 billion in loans.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
