Written by Government Relations, Government Relations Updates

CFPB Commences Military Lending Act Enforcement Action Against  FirstCash, Inc. and Cash America West, Inc. 

November 12, 2021 

Earlier today, the CFPB filed an action in Texas federal district court against FirstCash, Inc. and Cash America West, Inc. The CFPB previously ordered Cash America International, Inc. to halt its practices against military families, which prohibited Cash America and its successors from violating the MLA. As FirstCash is a successor to Cash America it is subject to that order.  

The CFPB alleges that since October 3, 2016, the two companies violated the MLA and DoD’s MLA regulation by charging higher than the allowable 36% APR on over 3,600 pawn transactions to active duty servicemembers and their dependents. Some of the charges are 

  1. imposing more than the maximum 36% Annual Percentage Rate, which if proven is a violation of the Act and Regulation and would cause all these transactions to be void from the outset. 
  1. including in the pawn transaction agreements provisions requiring borrowers to submit to arbitration, which if proven is a violation of the Act and Regulation; and 
  1. failing to disclose the Military Annual Percentage Rate to its borrowers. 

The CFPB requests that the Court permanently enjoin Defendants FirstCash and Cash America West  

  • from committing future violations of the MLA,  
  • from collecting, selling, or assigning debts arising from the void consumer-credit agreements, 
  • and impose civil money penalties on Defendants,  
  • order Defendants to pay damages, restitution, and other monetary relief to consumers, 
  • among other requests for relief. 

The CFPB filed this action in the United States District Court for the Northern District of Texas, Fort Worth Division where FirstCash, Inc. and Cash America West, Inc. are located. The CFPB press release is available at https://www.consumerfinance.gov/enforcement/actions/firstcash-inc-and-cash-america-west-inc/ and provides a link to the complaint. 

The NPA consistently advises the importance of compliance with all federal statutes and regulations, as well as all state laws and local requirements. Given the CFPB’s action today, a current review of your MLA compliance procedures is warranted to make sure that all your employees fully understand them. 

 This GRC Update is not intended and should not be construed as legal advice to NPA members.  
Members should consult their own lawyers for legal advice. 
Copyright © National Pawnbrokers Association 2021. All rights reserved. 

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