CFPB fines company for allegedly deceiving customers

The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against a Texas money transmitter who communicated to customers that it would not be responsible for “errors made by banks or payment agents, or for any other reasons out of our control.” The company, Maxitransfers Corporation, focuses its business on providing remittance services to the Latin American community. The consent order notes that remittance transfer providers are responsible for the errors of agents, contrary to Maxitransfer’s disclosures. The order also alleges several other failings, including a failure to create written policies and procedures relating to the Remittance Transfer Rule, a failure to report error investigations, and treat International bill-pay services as remittances. The consent order does not allege any direct consumer harm.

The consent order requires the company to pay a $500,000 fine, maintain proper policies and procedures and a compliance program to ensure compliance with the Remittance Transfer Rule and train its agents, employees, and service providers.

Chase Files Answer to Crypto Fees Class Action

On August 22, 2019, Chase Bank USA N.A. filed its answer to an April 2018 class action amended complaint that alleged that it breached its cardholder agreement when it charged fees for credit card purchases of cryptocurrency. For more on the filing, visit our sister blog, The Virtual Currency Report.

FinCEN launches new division to implement BSA/AML investigations

The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) recently launched a new division, the Global Investigations Division (“GID”), that will implement targeted investigations to fight money laundering and illicit financing threats. The new division will be led by Matthew Stiglitz, former Principal Deputy Chief for the Department of Justice’s Criminal Division.

The new division will use FinCEN’s BSA authority to investigate situations such as terrorist financing and money laundering, the proliferation of weapons of mass destruction, organized crime, and narcotics trafficking.

CA DBO Report: Lenders moving to higher interest installment loans

The California Department of Business Oversight (“DBO”) recently released two reports on the state’s payday lending laws, showing that non-bank payday lenders are issuing more long-term installment loans for larger amounts to consumers in the state. The DBO noted that payday lenders are charging an average interest rate of 376% and rely on repeat customers (80.7% of loan customers have taken out loans before). The numbers continue to show a long-term decline for the total number of payday loans and the aggregate dollar amount of payday loans.

The DBO Commissioner Maniel P. Alvarez noted that the results of the reports show that lenders also need to “focus on the availability and regulation of small-dollar credit products between $300 and $2,500” so Californians can have a number of credit options.