The truth, much like almost all for the other FTC cases that are payday-lending-related ended up being immediately settled.
Ahead of the enactment regarding the Dodd-Frank Act (the Act), federal enforcement of substantive customer financing rules against non-depository payday lenders had generally speaking been limited by prosecution that is civil the Federal Trade Commission (FTC) of unfair and misleading functions and techniques (UDAP) proscribed by federal legislation. Even though it might be argued that unjust techniques had been included, the FTC failed to pursue state-law rollover or usury violations. Due to the general novelty of this tribal financing model, as well as perhaps more to the point due to the tendency of FTC defendants to be in, you will find no reported decisions concerning the FTC’s assertion of jurisdiction over TLEs.
The FTC’s most general public (and maybe its very very very first) enforcement action against a purported payday that is tribal-affiliated had not been filed, as soon as the FTC sued Lakota money after Lakota had tried to garnish customers’ wages without getting a court purchase, to be able to gather on pay day loans. The FTC alleged that Lakota had illegally unveiled consumers’ debts for their companies and violated their substantive legal rights under other federal legislation, including those associated with electronic payments. Hence, it offers guidance that is little inform future enforcement actions by the FTC or the CFPB.
The Looming Battle Over CFPB Authority
Article X of this Act created the customer Financial Protection Bureau with plenary supervisory, rulemaking and enforcement authority pertaining to payday lenders. The Act will not differentiate between tribal and lenders that are non-tribal. TLEs, which will make loans to customers, autumn squarely in the concept of “covered persons” beneath the Act. Tribes aren’t expressly exempted through the conditions of this Act if they perform consumer-lending functions. Continue reading