ACH Processor for Payday Loan and Car Title Loan Lenders Charged by CFPB
42. For example, an ODFI complained to Defendants that one of its clients, an auto title lender, which was debiting varying amounts from consumers’ accounts multiple times, did not have the contractual right or proper consumer authorization to do so, stating that it was “not ok [for the] merchant to us[e] the ACH to ‘sneak’ attack a consumer’s account, [as] it will only draw regulatory attention.” Continue Reading..
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“California will track consumers who take out payday loans and ban letting online payday lenders getting electronic access to customers’ bank accounts under a new regulatory proposal, according to American Banker.”
“The new rules would require payday lenders to secure loans with a paper check instead of electronic account access. That would make it much harder for online payday lenders to do business — but those lenders are typically much more expensive than storefront lenders and generate more fraud and abuse, and most online lenders don’t have state licenses, according to a 2014 Pew Charitable Trusts report.”