The Consumer Financial Protection Bureau (CFPB) levied a $15 million fine against nonbank online lender Enova International for “widespread illegal conduct” that violated a previous agency order.
The details: The CFPB said in a press release Wednesday that Enova’s illegal conduct included “withdrawing funds from customers’ bank accounts without their permission, making deceptive statements about loans, and cancelling loan extensions.” The alleged actions affected more than 111,000 customers.
The CFPB fined the company $3.2 million in 2019 for similar alleged misconduct. The CFPB found new and continuing violations as it investigated whether Enova was complying with its previous order, the agency said.
The CFPB banned Enova, which arranges unsecured loans and lines of credit under the brand names CashNetUSA and NetCredit, from providing certain types of loans as part of a new order.
Compliance considerations: Enova must provide redress to customers it harmed, as well as being required to tie executive compensation to the company’s compliance with federal consumer financial protection laws.
“Enova’s executive compensation policies and agreements must consider the actions taken by the executive to ensure that the executive’s business or department complies with the order and federal consumer financial law,” the CFPB said.
Problems with internal payment processing systems, third-party vendors, incorrect minimum payments, and other issues caused Enova to overcharge customers by about $2 million since 2019, according to the CFPB’s order. Enova said it already repaid that money to customers.
Company response: In a statement, Enova said it fully cooperated with the CFPB’s investigation. It claimed the overcharges were the result of “unintended computer and system errors” and that it has taken steps to improve the problems identified.
“We take any errors in our systems very seriously, especially those that impact our customers, and will continue to invest in our technology, systems, and compliance processes to prevent, identify, and ensure appropriate resolution of errors,” said Ranning Li, president of consumer lending at Enova, in the statement.
Among improvements the company said it implemented included a centralized payment processing system; enhanced processes and systems to identify potential customer impacts and expedite restitution; and sunsetting its short-term single payment payday loan product, which made its last loan in August 2022.
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