Judge wants payday loan company to pay $ 132.5 million

A Kansas City payday loan company and its operator will be forced to pay $ 132.5 million in restitution to borrowers the company has duped, if a federal administrative judge’s recommendation is implemented.

It is not known if the victims of Integrity Advance will receive anything close to this amount. The company’s assets were sold years ago, the Kansas City Star reported Friday (September 4).

The legal recommendation comes after the Consumer Financial Protection Bureau (CFPB) filed a complaint against Integrity Advance. The agency’s case against the company could be affected if the CFPB director is replaced, which the U.S. Supreme Court said could happen.

The lender and its managing director, James Carnes, have appealed.

In her decision Against Integrity Advance and Carnes, Administrative Judge Christine L. Kirby found that the lender and its CEO engaged in three illegal practices: creating loan agreements that violated government regulations; misleading clients about the true cost of fully repaying loans; and withdrawing funds from borrowers’ bank accounts without their approval.

The case began in 2015 with accusations from the CFPB, according to court documents. Other court documents indicate that the company was incorporated in 2007 and issued loans from May 2008 to December 2012.

An investigator concluded, based on Kirby’s decision: “From May 2007 to July 2013, out of 207,426 loans, Integrity Advance obtained $ 132,580,041.06 more from its customers than the amount shown in the“ Total Payments ”boxes. “In (disclosure required) … out of 55,661 loans initiated on or after July 21, 2011, Integrity Advance obtained $ 38,453,341.62 more from its customers than the amount disclosed …”

The company’s loans, according to the case documents, ranged from $ 100 to $ 1,000.

Richard Zack, a lawyer representing Integrity Advance and Carnes, told The Star in an email: “We do not agree with the recommendation of the administrative judge. We are confident that at the end of this process, Mr. Carnes and Integrity Advance will be justified and found not responsible. “

The payday lending industry has come under fire for years, and some experts believe the technology can provide a desirable advantage. alternative.

In the meantime, government officials put in place by President Donald Trump’s administration have made changes regulations that some detractors of lenders saw as safeguards.

Nevertheless, the government continues to provide new fees against lenders.



On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.

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