CFPB Fines Online Lender $15 million in a New Consent Order

Earlier this month, the Consumer Financial Protection Bureau (“CFPB”) leveled a $15 million dollar penalty against online lender Enova in connection with what the CFPB characterized as widespread illegal conduct. The order follows a 2019 order from the CFPB against Enova that resulted in a $3.2 million penalty.

At issue in the new order were allegations that Enova engaged in the following illegal behavior:

• Withdrawing funds from borrower accounts without consent, including through the purchase of account information from online lead generators.
• Deceiving borrowers by failing to tell those that were granted loan extensions that making an interim partial payment would result in a cancellation of the extension.
• Failing to provide consumers copies of signed authorizations for recurring electronic fund transfers from the consumers’ accounts.

The $15 million civil money penalty payable to the CFPB is in addition to other penalties included in the order, including a requirement that Enova stop offering certain short-term loans to consumers for a period of 7 years and that Enova redress consumers by returning unlawfully debited amounts along with any associated fees, costs, and interest.

While Enova’s behavior was egregious, the order still holds important lessons for industry. Namely in ensuring clarity in all consumer communications and interactions but especially where conditions and terms of service are being discussed. It also highlights the real stakes that a regulatory enforcement action can take as $15 million CMP is in addition to Enova’s disgorgement of profits order, which can result in additional millions in payouts to consumers.

A copy of the CFPB’s press release announcing the order is available at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-fines-repeat-offender-enova-15-million-for-violating-order-deceiving-customers-and-withdrawing-funds-without-consent/