CFPB Fines Payday Lender $3.2M

The Consumer Financial Protection Bureau (CFPB) announced Friday that it has ordered Enova International to pay a $3.2 million civil penalty for unfair practices related to unauthorized debiting of accounts and failure to honor loan extensions.

The Bureau found that Enova, an online provider of unsecured payday and installment loans, violated the Consumer Financial Protection Act by debiting consumers' bank accounts without authorization. The Bureau said that while consumers had authorized the company to deduct payments from certain accounts, Enova in many instances debited from different accounts for which it did not have authorization.

In addition, Enova erroneously applied loan extensions to the wrong loan files and 308 consumers didn't receive the approved extensions. The Bureau found that the company also did not inform consumers of the errors and therefore could not reasonably have avoided the harm they experienced as a result.

Former Bureau Acting Director Mick Mulvaney previously indicated the Bureau would issue a rule-making to better clarify its definition of unfair, deceptive or abusive acts or practices (UDAAP). CUNA has long advocated for the Bureau to issue specific guidance on prohibited practices so financial institutions have more clarity.