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| Broker Companies Fined for Targeting Veterans |
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The CFPB and Arkansas attorney general settled a lawsuit this week with an individual for violating state and federal laws related to his broker companies' predatory practices targeting veterans. Andrew Gamber, who owned and operated the three companies, must pay $200,000 in restitution and a $75,000 fine to Arkansas' Consumer Education and Enforcement Fund.
According to the CFPB, Gamber's companies violated the Consumer Financial Protection Act and the Arkansas Deceptive Trade Practices Act by brokering contracts offering high-interest credit to consumers that were illegal and unenforceable. Under federal law, agreements where a person acquires the right to receive a veteran's pension payments is prohibited.
The companies also misrepresented to consumers that the product was a sale of payments and not a high-interest credit offer, and that consumers would receive funds from the companies within a specific time period but were not received by the specified date. The companies did not inform consumers of the applicable interest rate on the credit offer as well.
In addition to the fines, Gamber and his companies are permanently banned from brokering, offering or arranging agreements between pension recipients and third parties under which the consumer purports to sell a future right to an income stream from the consumer's pension.
This is the second settlement the CFPB has reached this year with an individual who was participating in similar activities. They come amid ongoing efforts to prevent other predatory practices aimed at veterans:
• The Department of Veterans Affairs (VA) earlier this year released an interim final rule amending its regulations regarding VA-guaranteed or insured cash-out refinance loans. The VA's rule implements a provision of the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) aimed at protecting veterans from predatory lending.
• Earlier this month, the Federal Housing Administration and Ginnie Mae released plans to adjust their cash-out refinance transaction policies to reduce risk. Ginnie Mae revised its pooling eligibility requirements applicable to all VA-guaranteed refinance loans.
Copyright 2019. NAFCU. (link) |
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