Enova Fined $15 Million and Banned from Offering Short-Term Loans

Published 6 months ago

The Consumer Financial Protection Bureau (CFPB) has imposed a fine of $15 million on US payday lender Enova for its “widespread illegal conduct”. The company has also been prohibited from offering certain types of consumer loans.

Accusations of Unauthorized Withdrawals and Deceptive Statements

The CFPB accused Enova of withdrawing funds from customer bank accounts without authorization, making deceptive statements about loans, and cancelling loan extensions. This isn’t the first time the company has come under fire for such practices. In 2019, it was fined $3.2 million and instructed to improve its operations.

Despite the initial penalty, Enova continued to violate the law, leading to the current ban and fine. As part of the enforcement action, the company is also required to provide redress to harmed consumers and link its executive compensation to compliance with federal consumer financial protection laws.

CFPB director Rohit Chopra stated that the company chose to disregard the law even after being caught exploiting customers and violating a law enforcement order.

Enova’s Response to the Penalties

In response to the CFPB’s actions, Enova claimed that these issues affected only a small part of its customer base and were due to unintentional technical and processing errors, which have since been rectified. Ranning Li, the president of consumer lending at Enova, emphasized the company’s commitment to investing in its technology, systems, and compliance processes to prevent, identify, and rectify errors.