The Consumer Financial Protection Bureau (CFPB) has ordered online lender Enova International Inc. to pay a $15 million penalty for widespread illegal conduct, including withdrawing funds from customers' bank accounts without their permission, making deceptive statements about loans, and canceling loan extensions. According to a document published by the CFPB, Enova paid a $3.2 million penalty in 2019 and was ordered to cease its illegal conduct.
The company is now banned from offering certain consumer loans, must provide redress to the consumers it harmed and must tie executive compensation to the company's compliance with federal consumer financial protection laws. Enova extends unsecured installment loans and lines of credit to consumers in 37 states through its CashNetUSA- and NetCredit-branded subsidiaries.
“Enova decided to keep flouting the law after it was caught taking advantage of its customers and violated a law enforcement order,” said CFPB Director Rohit Chopra. “Today’s action imposes a $15 million penalty, bans the company from certain lines of business and reforms executive compensation.”
The CFPB has found that Enova withdrew funds from consumers' accounts without their consent, using bank account information purchased from online lead generators. Enova also canceled loan extensions granted to certain consumers, debiting their bank accounts for the full payment instead of a smaller fee. Enova also deceived borrowers with false statements and omissions, misrepresenting the amount charged for interim partial payments, the due date for certain loan payments and the amounts due on certain loans. Additionally, Enova initiated recurring electronic fund transfers without providing consumers with a copy of signed authorizations, violating the 2019 order.
The CFPB has issued a new order requiring Enova to stop offering short-term loans, stop illegal practices, reform executive compensation, provide redress to consumers and pay a $15 million civil penalty to the CFPB victims relief fund. The order, which enforces the 2019 order, prohibits Enova from offering closed-end consumer loans that must be repaid within 45 days. Enova must also reform its executive compensation policies to ensure compliance with the order and federal consumer financial law. The order also mandates Enova to provide redress to consumers whose accounts were debited without their consent.
