Regulators pounce on payday lender Cash America

Nov. 20, 2013 at 7:44 PM
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WASHINGTON, Nov. 20 (UPI) -- U.S. regulators said Wednesday they cracked down on one of the country's largest payday lenders, Cash America, for a variety of abuses, including robo-signing.

Robo-signing is the practice of signing legal papers that are rushed through a process so quickly it is unlikely the person signing the documents even stopped to read them. It is considered a violation of a citizen's right to due process.

"Key documents such as legal pleadings, account evidence, and military status affidavits stated that they had been personally reviewed by attorneys, but the company actually had cut down on costs by having legal assistants manually stamp attorney signatures even though no attorneys had ever reviewed them," the Consumer Financial Protection Bureau said in a release.

The bureau, said it had ordered Cash America to pay $14 million to borrowers in Ohio for five years of robo-signing practices "related to debt collection lawsuits."

The bureau also said it was fining the company $5 million for robo-signing and for obstructing justice by, "among other things, destroying documents," bureau Director Richard Cordray said.

Cash America is a publicly traded company based in Fort Worth, Texas. It has hundreds of retail outlets and an online presence in 32 states, the agency said.

The agency also said the company had voluntarily begun returning $6 million to military borrower before being ordered to return a total of $14 million.

Cash America became cooperative by canceling debt collection judgments obtained improperly and removing those blemishes from the consumers credit reports. "This cooperation after our examiners uncovered serious violations was helpful, but it certainly does not undo all the damage already done," the bureau said.

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