CFPB Collects $92 Million For Lending Scheme Victims

The Consumer Financial Protection Bureau (CFPB) and 13 state attorneys general obtained $92 million in debt relief for servicemembers and other consumers harmed by a lending scheme that allegedly targeted military base communities. 

THE CFPB has permanently banned Colfax Capital Corporation and Culver Capital, LLC, also collectively known as Rome Finance, from consumer lending after allegedly deceiving about 17,000 military and nonmilitary consumers.

Rome Finance attracted consumers with the promise of no money down and instant financing, and then masked expensive finance charges by artificially inflating the disclosed price of the consumer goods being sold. The lender also allegedly withheld information on billing statements and illegally collected on loans that were void. 

Advertisement

Colfax, formerly known as Rome Finance Co., Inc., is a California consumer lending company and Culver is its wholly owned subsidiary, formerly known as Rome Finance LLC. The companies offered credit to consumers purchasing electronics, such as computers, videogame consoles, televisions, or other products. These products were typically sold at mall kiosks near military bases. In some cases, Rome Finance was the initial creditor, and in other cases, Rome Finance provided indirect financing by agreeing to buy the financing contracts from merchants who sold the goods.

“Rome Finance’s business model was built on fleecing servicemembers,” said CFPB Director Richard Cordray, in a news release. “Today, their long run of picking the pockets of our military has come to an ignominious end.”

Servicemembers and other consumers would fill out a credit application at the kiosk and, if approved, sign financing agreements that allegedly did not accurately disclose the amounts they would have to pay for that financing.

“These contracts generated millions for Rome Finance while weighing down consumers with expensive debt,” the CFPB said, adding that Rome Finance has been the subject of previous state and federal enforcement actions and Colfax is currently in Chapter 7 bankruptcy. 

The CFPB’s consent order mandates that in addition to paying about $92 million in debt relief, Rome Finance can no longer collect on its outstanding $60 million in contracts owed by about 12,000 consumers; collect on the about $32 million owed by more than 5,000 consumers for Rome Finance’s financing agreements; servicemembers may keep the merchandise they purchased; The Colfax Trustee must update other credit agencies and consumers of their debt status; and other actions.

The full text of the consent order can be read here

Written by Cassandra Dowell

Join the Conversation (1)

see all

This is a professional community. Please use discretion when posting a comment.

string(96) "https://reversemortgagedaily.com/2014/07/29/cfpb-collects-92-million-for-lending-scheme-victims/"

Share your opinion