The Consumer Financial Protection Bureau (CFPB) has slapped online lender Enova International Inc. with a hefty $15 million fine for its consistent illegal conduct, including unauthorized withdrawals from customers’ bank accounts, deceiving customers about loans, and canceling loan extensions. This is the second time Enova has been penalized by the CFPB; the company had previously paid a $3.2 million fine in 2019.
Enova, a publicly traded nonbank lender based in Chicago, Illinois, was ordered to cease its illegal practices in 2019. However, an investigation into Enova’s compliance with the 2019 order revealed that the company continued to break the law, affecting over 111,000 consumers.
The CFPB’s additional investigation found that Enova:
- Made withdrawals without borrowers’ consent, even using bank account information purchased from online lead generators
- Canceled loan extensions it had granted to certain consumers and debited such consumers’ bank accounts for the full loan payment instead of only a smaller loan extension fee
- Deceived borrowers with false statements and omissions, including misrepresenting loan due dates and amounts due
- Failed to provide consumers with copies of signed authorizations for recurring electronic fund transfers
As a result of these findings, the CFPB has issued an enforcement order requiring Enova to:
- Cease offering certain short-term loans for seven years
- Stop all specified illegal practices
- Reform executive compensation policies to ensure compliance with the order and federal consumer financial law
- Provide redress to all affected consumers, including returning all unlawfully debited amounts and associated fees, costs, and interest
- Pay a civil penalty of $15 million to the CFPB victims relief fund
Read the order here.
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