Illinois-based online lender, Enova International Inc., faces a staggering $15 million fine and stringent executive compensation revisions following a Consumer Financial Protection Bureau (CFPB) settlement. The CFPB alleges Enova engaged in extensive and persistent payment processing misconduct, breaching a 2019 settlement agreement.
CFPB Fines Enova $15M : Violations of Previous Settlement
The CFPB asserts that Enova, operating under the CashNetUSA and NetCredit consumer loan brands, attempted improper and unauthorized withdrawals from borrowers’ accounts. This act directly violated terms laid out in the 2019 settlement. Additionally, Enova failed to furnish borrowers with signed copies of debit authorization forms and neglected to honor granted loan extensions, adding further weight to the CFPB’s claims.
A Repeat Offender’s Reckoning
CFPB Director Rohit Chopra emphasized Enova’s status as a “repeat offender,” citing misconduct impacting over 111,000 consumers post-2019. The consent order, while not an admission of guilt, forces Enova to pay a $15 million civil money penalty and reimburse affected consumers. Beyond financial penalties, the order imposes a seven-year ban on certain short-term consumer loans and mandates executive pay to be tied to compliance with federal consumer financial laws.
Enova’s Defense and Commitment to Reform
Enova, in a separate statement, attributed the issues to “unintentional technical systems and processing errors” that have since been rectified. While the company disagreed with the CFPB’s characterization of the issues, it affirmed its commitment to improving practices. Ranning Li, Enova’s president of consumer lending, stated that the problems affected only a “small fraction” of their extensive customer base and transactions.
CFPB Fines Enova $15M : Learning from Mistakes
Enova, a significant player in the fintech lending sphere, assured full cooperation with the CFPB’s investigation. The company highlighted key enhancements to its business, including phasing out a problematic short-term, single-payment loan product. Although the order temporarily prevents the resumption of this product, Enova asserts that it aligns with current business practices and doesn’t substantially alter its offerings.
Past Troubles and Resilience
This is not Enova’s first run-in with the CFPB. In 2019, the company faced a $3.2 million fine over unauthorized debits and payment processing errors. Enova, a major financier providing $4.5 billion to borrowers last year, maintains its dedication to technology and compliance improvements.
CFPB Fines Enova $15M : Looking Forward
While Enova expresses disagreement with the latest CFPB characterization, it welcomes the resolution to move past the matter. The company, under renewed scrutiny for over two years, looks to the future despite the challenges. Enova, a member of the Community Financial Services Association of America, is also entangled in a Supreme Court case challenging the constitutionality of the CFPB’s funding structure.
