NetSpend to pay $53 million in settlement with FTC

NetSpend FTCLast week, the FTC announced that NetSpend, one of the nation’s largest providers of prepaid debit cards, had agreed to pay $53 million to settle allegations that it deceived consumers about their ability to access funds loaded onto their cards.

In November 2016, the FTC filed a lawsuit alleging that NetSpend engaged in misleading advertising practices in violation Section 5 of the FTC Act which prohibits unfair or deceptive acts or practices. The FTC’s complaint alleged that NetSpend made misrepresentations in marketing materials and on its website that led consumers to believe that the cards were “ready-to-use,” that they would have “immediate access” to funds loaded onto their cards, and that their money is “always available.” NetSpend also claimed that consumers are “guaranteed approval” for a card.

Santander settles unfair subprime auto loan case for $26 million

Santander subprime auto loan settlementSantander has agreed to pay $26 million to settle allegations that the bank issued high-interest loans to thousands of consumers who could not afford to repay them. The settlement was announced on March 29, 2017, by Massachusetts Attorney General Maura Healey and Delaware Attorney General Matthew Denn.

According to the press release from the State of Delaware, an investigation into the financing and securitization of Santander’s subprime auto loans revealed that the bank funded loans without having a reasonable basis to believe that the borrowers could afford them. According to the Delaware consent order, Santander predicted that “more than half” of the subprime loans acquired from certain Delaware auto dealers would default.

Wells Fargo earns failing lending rating based on discriminatory credit practices

Wells Fargo ratingOn Tuesday, Wells Fargo disclosed that the Office of the Comptroller of the Currency (OCC) downgraded the bank’s latest Community Reinvestment Act Performance Evaluation rating to “needs to improve,” the second-lowest of four possible ratings.

Enacted by Congress in 1977, the Community Reinvestment Act requires banks to make loans in the communities where they do business and is intended to promote lending in low- and moderate-income neighborhoods.

Student Loan Group to pay $375K settlement for alleged debt relief scam

Student Loan Group lawsuitOn March 27, 2017, the North Carolina Attorney General (AG) issued a press release announcing that a settlement with a student loan company that allegedly operated a “student loan debt relief scheme.”

According to the press release, Student Loan Group, a private student loan company located in North Carolina, falsely promised to reduce a borrower’s student loan debt but instead charged illegal upfront fees and failed to deliver on its promises.