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Pre-CFPB Federal Regulation of Payday Lending

Pre-CFPB Federal Regulation of Payday Lending

Ahead of the enactment of this Dodd-Frank Act (the Act), federal enforcement of substantive consumer financing rules against non-depository payday lenders had generally speaking been restricted to civil prosecution by the Federal Trade Commission (FTC) of unjust and misleading acts and methods (UDAP) proscribed by federal legislation. Though it could possibly be argued that unjust methods were involved, the FTC failed to pursue state-law usury or rollover violations. Due to the general novelty regarding the lending that is tribal, and maybe moreover due to the tendency of FTC defendants to be in, you can find no reported decisions in connection with FTC’s assertion of jurisdiction over TLEs.

The FTC’s most public (and maybe its very very first) enforcement action against a purported payday that is tribal-affiliated had not been filed until September 2011, once the FTC sued Lakota money after Lakota had tried to garnish customers’ wages without obtaining a court purchase, to be able to gather on pay day loans. The FTC alleged that Lakota had illegally unveiled consumers’ debts for their companies and violated their substantive legal rights under other federal guidelines, including those concerning electronic repayments.