CSFB Fines Lender Enova $15 Million For Illegal Practices Against Consumers

The Consumer Financial Protection Bureau (CFPB) applied a fine of $15 million to consumer lending firm Enova and ordered the company to stop offering some short-term loans.

The government agency said Enova illegally withdrew funds from customers' bank accounts without their permission, made deceptive statements about loans, and canceled loan extensions.

CFPB, which has the authority to take action against institutions violating consumer financial protection laws, also said the lender violated another 2019 order to stop the illegal conduct. At that time, Enova was fined $3.2 million.

CFPB is demanding the firm to provide redress to the consumers it harmed and to tie executive compensation to compliance with federal consumer financial protection laws.

"Enova decided to keep flouting the law after it was caught taking advantage of its customers, and violated a law enforcement order," CFPB Director Rohit Chopra said. "Today's action imposes a $15 million penalty, bans the company from certain lines of business, and reforms executive compensation."

Enova extends or arranges unsecured installment loans and lines of credit to consumers in 37 states in the U.S., the CFPB said. The lender has more than 9 million customers, according to its website.

The company said it cooperated in the investigation, addressed the issues raised by the CFPC and agreed to pay the fine. Enova said it disagrees with the assessment of the issues by CFPB.

"While the errors identified in this settlement are similar to those addressed in the 2019 order, they do not arise from deliberate attempts to avoid law, but instead resulted from unintended computer and system errors," the company said in a statement.

Enova said the settlement isn't expected to have a material impact its operations.