CFPB fines Alabama lender but suspends most of penalty

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WASHINGTON — The Consumer Financial Protection Bureau announced an enforcement action Thursday against an Alabama-based small-dollar lender and stipulated a fine of more than $1.5 million, but suspended most of the payment out of concern that the company could not pay the full amount.

The action was brought against Triton Management Group, a company that runs storefront loan businesses under the names Always Money and Quick Pawn Shops in Alabama, Mississippi and South Carolina. The bureau determined that from January 2013 through May 15, 2015, the firm had unfairly charged Mississippi consumers excess interest in violation of state law.

The bureau determined that the excess interest amounted to $1,522,298 charged to 1,309 consumers, and issued a “judgment for equitable monetary relief” in that amount. But the CFPB suspended all but $500,000 of that penalty because the company showed that it could not afford to pay the full amount. If the bureau determines that the company was untruthful about its representations, however, it would impose the full penalty.

In an example outlined in the enforcement action, a consumer who borrowed $2,500 would have concluded that they would pay $625 in finance charges, but instead would be charged $3,437.50 over the course of the loan. The company also failed to advertise the annual percentage rates of their loans, the agency said.

“Based on financial statements and supporting documentation that Respondents submitted to the Bureau and Respondents’ demonstrated inability to pay the Total Excess Finance Charge Amount, Respondents are ordered to pay $500,000 toward the Total Excess Finance Charge Amount,” the order said. “If the Bureau in its sole discretion determines that Respondents have failed to disclose any material asset … then the suspension of the Total Excess Finance Charge Amount ordered in Section VI will be terminated.”

In a statement issued through its attorney, the company said it was "pleased to put the Bureau’s investigation behind it."

"While the Company did not believe it engaged in any wrongdoing, and did not admit to liability as part of the settlement, it recognized that a prolonged entanglement with the Bureau was not in its best interests," the company said. "Moving forward, the Company will build on its excellent reputation for customer service and continue to do what it does best: providing credit to Alabama, Mississippi, and South Carolina consumers."

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