The Maryland Department of Labor’s Office of Financial Regulation has announced a settlement with a number of companies now owned by the Bank of Missouri for not being properly licensed in the state to provide retail credit services and for engaging in unlicensed and unregulated debt collection activities. The company will pay $275,000 to settle the lawsuit that was filed against it.
The Background: Back in 2017, the Bank of Missouri acquired Mid-America Bank & Trust Company. That included two other companies — Atlanticus and Fortiva Financial. Through January 2018, more than 7,200 Maryland consumers had Fortiva credit accounts — personal loans and credit cards — totaling more than $7.8 million.
- Back in 2016, the Maryland State Collection Agency Licensing Board received a complaint from a consumer, claiming that the interest rate on a personal loan exceeded the rate that could be charged in the state.
- In 2017, the state began an investigation that lasted until 2021.
- The parties disputed and denied that they ever engaged in any activity that required a license in Maryland, and the state noted that a legal and factual dispute exists whether Atlanticus’s activities triggered the licensing requirement under the Maryland Credit Services Business Act.
The Settlement: Under the terms of the settlement, the Bank of Missouri will pay $50,000 to cover the investigation costs that were incurred by the state and $225,000 in an administrative payment. The Bank also agreed that neither Atlanticus nor Fortiva will conduct debt collection activities in their name.
The Last Word: “Interstate consumer lending has increasingly involved a complicated web of financial institutions that state financial regulators need to untangle,” said Commissioner of Financial Regulation Antonio P. ‘Tony’ Salazar, in a statement. “As we do so, the Office of Financial Regulation will ensure that the lenders and their partners adhere to all applicable state laws and, when appropriate, such as in this case, hold businesses like Atlanticus and Fortiva responsible for providing financial services to Marylanders without the required licenses.”
