The Consumer Financial Protection Bureau on Friday banned the online payday lender NDG Financial, its majority owner Sagewood Holdings, three corporate officers and nearly a dozen affiliated companies from lending to U.S. consumers.
The CFPB alleged that NDG in Manitoba, Canada, operated a cross-border payday loan scheme in which the companies threatened consumers with lawsuits, arrests, imprisonment or wage garnishment in trying to collect debts in states with usury laws where payday loans are illegal.
The
Three corporate officers — CEO Kimberly DeThomas, Jeremy Sabourin and William Wrixon, all of Manitoba — were permanently barred from offering, promoting or collecting on “any consumer loan issued to any consumer residing in the United States,” according to a 19-page settlement proposal.
The settlement, filed in the U.S. District Court for the Southern District of New York, does not mention any restitution for consumers or civil money penalties to be paid to the bureau. The CFPB's
Last year, the CFPB under acting Director Mick Mulvaney dismissed charges against six defendants in the case and the bureau "moved for terminating sanctions against the remaining executives," according to the CFPB’s
In November, one of the payday lender's lead attorneys, Steven Engel, was named an assistant attorney general at the Justice Department, according to
The CFPB said the companies and officials misled consumers in telling them that payday loan agreements were not subject to federal or state laws. The companies and officials also misrepresented that nonpayment of the debts would result in lawsuits, arrests, imprisonment and wage garnishment.
The CFPB said the companies and officials “conditioned loan agreements upon irrevocable wage assignment clauses, which the Bureau alleges violated the Credit Practices Act.”
The proposed settlement made no mention of the companies engaging in unfair, deceptive or abusive acts or practices even though the CFPB had originally sued alleging UDAAP violations in seeking to end the companies’ alleged illegal practices and obtain monetary relief for consumers.