National consumer agency hits local payday lender with penalty - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

National consumer agency hits local payday lender with penalty

Posted: Updated:

WASHINGTON, WA – The Consumer Financial Protection Bureau (CFPB) announced Friday that Washington State payday lender MoneyTree has agreed to pay $255,000 in refunds to consumers. In addition, they will pay a $250,000 penalty for deceiving customers about prices, making false threats of vehicle repossessions, and withdrawing funds from customer accounts without authorization.

Anti-poverty and consumer advocates were quick to support the actions taken by the CFPB. Marcy Bowers, executive director of the Statewide Poverty Action Network, noted that financial institutions, including banks and payday lenders, must be subject to strong regulation.
Bowers made the following statement:

“Poverty Action commends the CFPB for taking this action. The behaviors CFPB uncovered in their investigation of MoneyTree are just ugly and needed to be stopped.

“The CFPB has been a strong defender of consumers since its inception, and the MoneyTree action is just the latest in a long list of enforcements the CFPB has undertaken to protect hardworking Americans from unscrupulous financial practices.

“Poverty Action also urges the CFPB to finalize a strong rule regulating payday lending. While enforcement actions like those taken against MoneyTree are essential in stopping extreme abuses, rules are also needed to address the nature of the payday lending business model. The payday lending model, by design, traps borrowers in high-cost debt by making unaffordable loans. Nationally, an average payday loan borrower repays $827 to borrow $339. That shows the inherent abuse of this product.”