HARRISBURG, PA — In a landmark move, the United States District Court for the Eastern District of Pennsylvania has denied a motion to dismiss a multistate lawsuit against Mariner Finance, LLC, a Wall Street private equity-owned lender accused of charging Pennsylvanians millions of dollars in hidden fees and interest.
The decision, announced by Attorney General Michelle Henry on Thursday, marks significant progress in the lawsuit, in which Pennsylvania is joined by New Jersey, Washington, Oregon, and Washington D.C. Mariner Finance had sought to have all 15 federal and state law claims in the lawsuit dismissed.
This court decision is particularly significant as it reaffirms the ability of state attorneys general to jointly bring Consumer Financial Protection Act (CFPA) claims in one court. This approach conserves states’ resources and potentially expedites the litigation, signaling a win for consumer protection efforts.
“This predatory lending company’s deceptive practices harmed borrowers. The company put its own profits ahead of the interests of customers who trusted Mariner to give them a loan without hidden junk fees,” Attorney General Henry stated. “The federal court’s decision is major progress for consumers who were duped of millions of dollars by a company that then attempted to avoid facing the allegations at trial. We still have important work to do, but we are one step closer to getting justice.”
The lawsuit alleges that Mariner Finance charged consumers for hidden add-on products that they either didn’t know about or didn’t agree to buy. This practice added hundreds to thousands of dollars to the total amount a consumer owed. Additionally, Mariner allegedly pushed borrowers who missed a payment to refinance their loan, adding further costs to the total repayment.
According to the lawsuit, from 2015 to 2018, Mariner charged Pennsylvanians $19.5 million for add-ons and an additional $8 million in interest.
In its 35-page opinion, the court rejected all of Mariner’s arguments, including that the venue was improper because the five plaintiff states chose to sue together in one court rather than in five separate courts. The court also rejected Mariner’s argument that the states had not complied with the CFPA’s provision requiring states to notify the Consumer Financial Protection Bureau of a planned lawsuit.
A spokesperson from Mariner Finance stated, ” While we are disappointed in this ruling, we remain confident that a thorough review of the facts will make clear that Mariner Finance has always acted appropriately in service of our valued customers. As an important provider of credit to those who may have limited access to other sources of consumer credit, Mariner Finance holds itself to the highest standards of customer care.”
This decision is one of the only cases to date where a court has weighed in on these issues. Attorney General Henry hopes this well-reasoned opinion will positively impact future efforts by state attorneys general and bank regulators to protect consumers with enforcement actions. This ruling is a significant step towards holding predatory lenders accountable and ensuring consumers are protected against deceptive practices.
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