TitleMax fined for violating Military Lending Act

Published: Mar. 24, 2023 at 6:15 PM EDT
Email This Link
Share on Pinterest
Share on LinkedIn

SAVANNAH, Ga. (WTOC) - Lawmakers in Washington are urging Federal regulators to take a closer look at a Savannah-based business.

The move comes after the Consumer Financial Protection Bureau fined TitleMax $15 million and placed the company under a consent order last month.

The CFPB says the company’s lending and sales practices violated the law.

Last week, Democrats on the Senate Budget Committee wrote to the head of the CFPB about TitleMax’s parent company.

In statement, the committee said in part, “We are deeply concerned that TMX Finance’s predatory behavior concerning title loans continued while under an active consent decree.”

TitleMax has been in hot water with the Bureau before over its lending and debt-collection practices.

The agency calls the company a “repeat offender” and Senators are asking for more oversight.

The Bureau says TitleMax violated the Military Lending Act, making more than 2,600 prohibited loans to service members and their families.

They say the company made loans to military families at interest rates over 36%, and many times over 100%.

They also say the company doctored information to cover its tracks and keep borrowers from being identified as service members or their dependents.

The Bureau ordered TitleMax to pay more than $5 million to consumers for payments of illegal fees and interest and another $10 million penalty to the Bureau’s victims relief fund.

They also ordered the company to take more steps to stop illegal lending practices.

The company responded with this statement, “Although the company agreed to pay a fine to the CFPB, it did so to avoid lengthy and costly litigation, which would be a distraction for the Company’s core business of providing best-in-class services to its customers. The Company denies any wrongdoing or liability.”

WTOC reached out to Georgia U.S. Senators Raphael Warnock and Jon Ossoff.

Senator Warnock’s office responded with this statement, “Senator Warnock is eager to work with his colleagues on both sides of the aisle to protect Georgians from lenders’ deceptive and unfair practices.”

Legislation introduced this year in the Georgia General Assembly would have reformed how TitleMax and other title lending companies do business in the state, but that legislation never made it out of committee.