The Consumer Financial Protection Bureau on Friday announced it had filed a lawsuit against LendUp, an online lender, accusing it of violating the Military Lending Act, as part of a “broader Bureau sweep of investigations of multiple lenders” who might be violating the law.
A copy of the complaint filed against LendUp, which was filed in the District Court for the Northern District of California, can be accessed by clicking here.
The Military Lending Act regulates certain lending practices when originating loans to active duty service members. Among the provisions is the establishment of a Military Annual Percentage Rate cap of 36% on most consumer loan products, a ban on prepayment penalties, and a prohibition against requiring mandatory arbitration in the event a service member wishes to take action against a financial services company.
In its suit, the CFPB accused LendUp of violating the Military Annual Percentage Rate, the prohibition against requiring mandatory arbitration, and not making certain disclosures required under the law.
LendUp has allegedly made more than 4,000 loans to 1,200 individuals who are covered under the Military Lending Act since October 2016, according to the CFPB’s suit.
The CFPB is seeking to permanently enjoin LendUp from violating the Military Lending Act, correct information it has submitted to credit reporting agencies, permanently enjoin LendUp from collecting or selling debts that were void because they violated the MLA, impose a civil money penalty, and have the company pay damages and make restitution to service members who obtained loans that were in violation of the MLA.
