CFPB sues FirstCash, unit over alleged Military Lending Act violations

The Consumer Financial Protection Bureau filed a lawsuit against FirstCash Inc. and its subsidiary, Cash America West Inc., alleging the companies violated the Military Lending Act.

The CFPB's lawsuit, filed Nov. 12 in a Texas federal district court, alleges that between June 2017 and May 2021, the companies made more than 3,600 pawn loans to active-duty servicemembers and their families with annual percentage rates higher than the 36% permitted under the MLA. The loans often had APRs exceeding 200%, according to a CFPB press release.

The regulator also alleges that FirstCash violated a 2013 CFPB order against its predecessor company, Cash America International Inc., prohibiting Military Lending Act violations.

The CFPB is seeking an injunction, redress for affected borrowers and a civil money penalty.

In a Nov. 12 statement, FirstCash said the regulator's allegations are "without merit."

"We will seek to engage with the CFPB and respond to the allegations appropriately," the release said.