UPDATE 1-U.S. Consumer Watchdog Fines TitleMax $10 Mln for 'Illegal' Lending
(This Feb 23 story was updated on Feb 24 to include company comment in paragraphs 2, 7 and 8.)
Feb 23 (Reuters) - The U.S. consumer watchdog on Thursday fined TitleMax $10 million, saying the Georgia-based title lender illegally made thousands of auto loans to military borrowers over a five-year period, often charging interest rates well above legal limits.
In a statement issued on Friday, TitleMax said it "vehemently denies" any wrongdoing.
The Consumer Financial Protection Bureau said the business, which comprises an array of entities operating under TMX Finance LLC, was a repeat offender. The CFPB fined TitleMax $9 million in 2016 for allegedly misrepresenting loan costs and using "high pressure" debt collection practices, the bureau said in a statement.
CFPB Director Rohit Chopra called TitleMax's behavior "predatory," citing the lender's steps to hide allegedly illegal behavior by doctoring borrowers' personal information so they would not be identified as military service members or their dependants.
From 2016 to 2021 TitleMax made nearly 2,700 prohibited auto loans to borrowers covered by the Military Lending Act and charged illegal fees on about 15,000 loans, the CFPB said.
In its statement, TitleMax said the CFPB's factual and legal allegations were unproven and untrue. It also denied being a repeat offender, saying it had complied with all prior Bureau directions.