- The Consumer Financial Protection Bureau (“CFPB”) reached a settlement with financial company Driver Loan, LLC and its Chief Operating Officer (collectively “Driver Loan”) to resolve allegations that it misled consumers with respect to its financial products in violation of the Dodd-Frank Consumer Financial Protection Act.
- The complaint alleged that, among other things, Driver Loan made short-term, high-interest consumer loans that violated Florida’s usury laws and misrepresented the interest rates that consumers were required to pay on the loans, which in actuality reached as high as 990%. In addition, Driver Loan allegedly funded its loans with deposits collected from other consumers, and marketed its deposit scheme with promises that the funds were “FDIC insured” at member banks and that the deposits were guaranteed to return 15% annual percentage yield, even though the deposits were not placed in FDIC-insured accounts and were not guaranteed to produce any return.
- Under the terms of the proposed stipulated final judgment, Driver Loan will return approximately $1 million in deposits it collected plus all interest due to consumers under the terms it advertised, and also will pay a $100,000 civil money penalty to the CFPB. Driver Loan will also be permanently banned from any deposit-taking activities, among other things.