Last Thursday the Consumer Financial Protection Bureau (CFPB) dismissed the case it had filed in April 2017 against four payday lenders. No reason was given. The case is CFPB v. Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc. and Majestic Lake Financial, Inc. (Civil Case No. 2:17-cv-02521-JAR-JPO)

The original complaint was filed April 27, 2017. You can download a copy here.

The case was dismissed without prejudice. You can download the dismissal notice here.

Editor's note: Dismissal without prejudice means that the plaintiff is free to re-file a case against the defendant based on the same claim.

The CFPB announced at the time they filed the case that it was taking action against the group of lenders "for deceiving consumers by collecting debt they were not legally owed. The Bureau alleged,

"[t]he four lenders could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders. The CFPB alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe. The CFPB seeks to stop the unlawful practices, recoup relief for harmed consumers, and impose a penalty."

Two days prior to this dismissal, the CFPB announced it would be re-considering the Payday, Vehicle Title, and Certain High-Cost Installment Loans ("Payday Rule"), published in the Federal Register on November 17, 2017, scheduled to take effect January 16, 2018.

This is the latest action in a series that appears intent on undoing the work of former CFPB Director Richard Cordray. Other significant actions by Acting Director Mick Mulvaney include:

  • Announced new staff additions -- several on loan from Mulvaney's other place of work, the Office of Management and Budget.
  • Abandoned the planned consumer debt collection disclosure survey.
  • Announced that the Bureau does not intend to assess penalties for errors in data collected in 2018, and plans to reconsider aspects of the Mortgage Data Rule.
  • Hired new Chief of Staff, the former Staff Director of the House Financial Services Committee under Rep. Jeb Hensarling (R-TX). Hensarling famously opposes the concept of the CFPB.
  • Updated the stated mission of the Bureau.
  • Announced "call for evidence" to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers.
  • Requested $0 from the Fed to fund the Bureau for Q2 2018.

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