Education News Simulator Your Money Advisors Academy News Personal Finance News CFPB Sues ACE Cash Express, Alleging Concealment of Free Repayment Plans The agency also says its findings that the cash lender illegally erased customer funds. By Ben Luthi Published July 14, 2022. The Consumer Financial Protection Bureau (CFPB) issued a suit on Tuesday in the case against ACE Cash Express. The federal agency claims that the payday lender has raked in the equivalent of $240 million fee for reborrowing from customers who were eligible to receive free loans and also deceived about the amount of times it attempted to deduct money from accounts held by the borrower. Essential Takeaways The CFPB is suing payday lender ACE Cash Express for charging illegal fees and for making illegal debits from the borrowers' accounts. The Federal agency claims that the bank is considered to be a repeat offender, citing a 2014 enforcement action that led to $10 million in penalties and reimbursements for the borrower. The CFPB is seeking relief in the form of monetary compensation for consumers and injunctive relief. It also seeks civil penalties, and disgorgement as compensation for unfair gains. The CFPB's Lawsuit Against ACE Express Cash Express ACE Cash Express is a payday loan company that also offers title loans or check cashing bill pay , and a variety different financial services.1 However, the way the lender handles payday loans is what brought to a lawsuit brought by the CFPB. The agency claims that the lender is in violation of federal laws. More specifically: Paying off free plans In 10 states consumers are entitled to an unrestricted repayment plan every year. They can make 4 equal installments instead of the lump sum and with no additional fees or interest. Instead of making the borrowers aware of this possibility, ACE Cash Express told them that their only options were only a limited grace period or a refinance based on fees. The CFPB reports that the company has been able to collect at least $240million in fees due to these borrowers since the year 2014. Illegally withdrawing money: In many States, payday loan contracts state that the lender has the ability take repayment back up to three times. However the CFPB declares the following: ACE Cash Express has made an illegal fourth withdrawal at more than 3,000 times between 2016 and now which resulted in $1.3 million in cash that was debited illegally. 2 The CFPB will also note an enforcement action it initiated against ACE Cash Express in 2014, which required the payday lender to stop forcing clients into perpetual cycles of debt and other illegal debt collection practices.3 The lender wrote in a press release that the lawsuit was unfounded, and argues that the improper withdrawals affected only 0.028 percent of loanees and there are more than 140,000 who have used the payment plan option by arguing that consumers know about the option.4 Sponsored Reliable, Simple, Innovative CFD Trading Platform Looking for a reliable CFD trading site? As Germany's No. CFD Provider (Investment trends 2022) Plus500 is a licensed CFD provider whose platform is protected through SSL. 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More Student Debt Definition Student debt is the term used to describe loans to cover the tuition fees at college that become due after the student has graduated or leaves the school. more Regulation B (Reg B) in the Equal Credit Opportunity Act (ECOA) Regulation B outlines the requirements that lenders need to adhere to when they seek and process credit information. More Consumer Financial Protection Act The Consumer Financial Protection Act of 2010 established the Consumer Financial Protection Bureau (CFPB). More What is the Equal Credit Opportunity Act (ECOA)? Purpose The Equal Credit Opportunity Act (ECOA) is a federal civil rights statute that prohibits lenders to deny credit to a person regardless of the reason, which is unrelated to the applicant's capacity to repay. 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