The CFPB and state attorneys general of New York, Massachusetts and Virginia jointly sued a company and its owners for alleged predatory lending practices that primarily targeted non-English speaking immigrants.

In a Complaint filed in the U.S. District Court for the Western District of Virginia, the CFPB and the state attorneys general alleged that the company targeted immigrants who were detained in U.S. Immigration and Customs Enforcement detention facilities. In exchange for securing a bond, the company allegedly required exorbitant upfront fees that frequently amounted to 25-30 percent of the bond, in addition to the "leasing" of GPS-tracking ankle monitors that the consumers would be required to wear for the duration of their cases. The coalition stated that consumers and their co-signers frequently did not understand the terms of their contracts as the contracts were only in English.

The company is alleged to have:

  • misrepresented its payment of consumers' bonds and use of consumer monthly payments, as the company was just an intermediary to a bond agent;
  • threatened placement of GPS devices on co-signers without any authority to do so;
  • threatened consumers with re-arrest, detention or deportation if they were unable to make monthly payments or if they took off the company's required GPS device;
  • threatened the turnover of consumer accounts to debt buyers or collection agencies, and the reporting of information to credit-reporting agencies;
  • falsely claimed that its customers would receive free legal representation for their immigration cases;
  • threatened criminal prosecution for consumers who tampered with their GPS devices;
  • failed to return, as it claimed it would, (i) collateral payments to consumers following the resolution of their immigration proceedings and (ii) initial payments made by consumers who eventually did not use the company's services; and
  • as a result of its inaccurate recording of consumer payments, unjustly demanded payments from consumers that were not owed.

The CFPB and state attorneys general are seeking (i) enjoinment of the defendants from further violations, (ii) damages, restitution and other forms of monetary relief, (iii) disgorgement of ill-gotten gains and (iv) civil money penalties to New York, Massachusetts, Virginia and the CFPB.

Commentary Rachel Rodman

As one of the first enforcement actions under Acting Director David Uejio, both the substance of this action - with its focus on an alleged scheme targeted at a minority community - and the press release reflect a change in priorities and tone at the CFPB.

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