WASHINGTON — Mortgage lender RMK Financial Corp. is facing a $250,000 fine by the Consumer Financial Protection Bureau on grounds that it used deceptive advertising.

The CFPB's administrative order issued Thursday accuses the California lender of using ads designed to convince consumers that it was affiliated with government agencies. RMK agreed to stop such practices and pay a $250,000 civil money penalty without confirming or denying guilt.

"Deceptive advertising has no place in the mortgage marketplace, and the Consumer Bureau will continue to take action against companies that mislead consumers with false claims of government affiliation," said CFPB Director Richard Cordray in a press release. "Today's action sends a clear message that misleading consumers is illegal, unacceptable, and will not be tolerated."

The CFPB said RMK Financial sent out mailings to more than 100,000 consumers that used the names and logos of the Department of Veterans Affairs and the Federal Housing Administration. Such advertisements were also sent to "tens of thousands of U.S. military servicemembers and veterans" as well as holders of VA-guaranteed mortgages. RMK Financial also does business under the name Majestic Home Loans.

"The company's typical advertisement for VA mortgages featured the Department of Veterans Affairs seal and logo at the top of the page and described its loan products as part of a 'distinctive program offered by the U.S. government. The ad instructed consumers to call the 'VA Interest Rate Reduction Department' at a phone number that in fact belonged to RMK," the CFPB said. "Some mailers were labeled 'FHA Benefits' and included an image of the Statue of Liberty on the outside, along with warnings citing the U.S. Code and threatening fines and imprisonment for tampering with the letter."

The CFPB said that RMK Financial's ads also misrepresented the interest rate and estimated monthly payments of the loan, "including whether the interest rate was fixed or variable."

RMK Financial was cited for violating federal consumer laws including the Truth in Lending Act and the Mortgage Acts and Practices Advertising Rule.

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