Newsroom
October 29, 2015
Servicemember auto lender to pay $3.38M over UDAAP
The CFPB filed an administrative order Wednesday against Security National Automotive Acceptance Company related to charges the bureau lodged this June alleging illegal debt collection practices.
The bureau pursued the charges under its statutory authority to enforce against unfair, deceptive or abusive acts or practices (UDAAP). NAFCU Director of Regulatory Affairs Alicia Nealon said this authority is bestowed by statute. While not addressed in specific CFPB rules, it can potentially be applied to an institution regardless of asset size.
"CFPB's UDAAP authority is not constrained by institution type or product market," said Nealon. "It is important that all lenders, including credit unions, be clear and complete in their own compliance programs to guard against even the appearance of such activity."
Under Wednesday's order, Security National will refund or credit about $2.28 million to servicemembers and other consumers who were allegedly harmed by its activities; it will also pay a penalty of $1 million.
A separate court order bans the company from using aggressive tactics, such as exaggeration, deception and threats to contact commanding officers, to coerce servicemembers into making payments.
The bureau pursued the charges under its statutory authority to enforce against unfair, deceptive or abusive acts or practices (UDAAP). NAFCU Director of Regulatory Affairs Alicia Nealon said this authority is bestowed by statute. While not addressed in specific CFPB rules, it can potentially be applied to an institution regardless of asset size.
"CFPB's UDAAP authority is not constrained by institution type or product market," said Nealon. "It is important that all lenders, including credit unions, be clear and complete in their own compliance programs to guard against even the appearance of such activity."
Under Wednesday's order, Security National will refund or credit about $2.28 million to servicemembers and other consumers who were allegedly harmed by its activities; it will also pay a penalty of $1 million.
A separate court order bans the company from using aggressive tactics, such as exaggeration, deception and threats to contact commanding officers, to coerce servicemembers into making payments.
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