On April 14, 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that it reached a settlement with a New Mexico-based tax-refund lender over claims that the lender steered borrowers to excessively costly products, failed to accurately disclose the APR for loans, and failed to notify the availability of refunds. The CFPB alleged in its Complaint that the refund lender steered low-income borrowers to high-cost tax refund-anticipation loans that carried triple digit APRs in violation of the Consumer Financial Protection Act (“CFPA”) and the Truth in Lending Act’s (“TILA”) implementing regulations (“Regulation Z”). As part of the settlement, the proprietors of the business have agreed to stay out of the tax-refund market for a period of five years, provide restitution to consumers, and pay $438,000 in civil penalties.
