WILMINGTON, Del.--(BUSINESS WIRE)--TMX Finance LLC (Company) today announced that it has reached a settlement with the Consumer Financial Protection Bureau (CFPB), which concludes the CFPB’s three-year review of various aspects of the Company’s business operations.
The Company has been transparent and cooperative with the CFPB. Without admitting any of the CFPB’s findings of fact or conclusions of law, the Company has agreed to pay a civil money penalty of $9 million as part of the settlement. The payment will be reflected in the Company’s quarterly financial statements for the quarter ending September 30, 2016. Unlike consent orders that the CFPB has previously entered into with other companies within the emergency credit space, this order does not require the Company to pay any restitution to customers.
“This resolution of the CFPB’s investigation addresses and mitigates the CFPB’s identified concerns while allowing us to continue meeting the urgent financial needs of our customers. Many of our customers have nowhere else to turn when they suffer from short-term financial setbacks like medical emergencies or home repairs, and we are committed to remaining a reliable source of credit for them when the need arises,” said Otto Bielss, President of the TMX Finance Family of Companies. “We continue to focus on enhancing and strengthening our compliance program to support responsible lending practices and our compliance with applicable state and federal consumer lending and consumer protection laws.”
The CFPB’s concerns focused on the use of a voluntary payback guide in certain states and the prior use of in-person collections visits to consumers. Since 2015, the Company’s lending subsidiaries have prohibited in-person collections activities at consumer residences and places of employment. In order to conclude the investigation, the Company’s lending subsidiaries also will discontinue using the voluntary payback guide, which was designed to assist customers in understanding the ramifications of renewing or extending their 30-day credit transactions.
About TMX Finance
The TMX Finance Family of Companies provides consumer credit products under the TitleMax, TitleBucks, and InstaLoan brands. Since 1998, we have provided access to credit to consumers who are underserved by traditional lenders. With over 1,200 stores in 18 states, we are an industry leader throughout the Southeast, Southwest and Midwest and on the West Coast.
Forward-Looking Statements
This announcement contains certain forward-looking statements about the Company’s future business performance and profitability. These statements are based on the Company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates will, should or may occur in the future are forward-looking statements. Actual results for future periods may differ materially from those expressed or implied by these forward-looking statements due to a number of uncertainties and other factors. If you are an investor or potential investor, for a discussion of a variety of risk factors affecting the Company’s business and prospects, see the section captioned “Risk Factors” in the Company’s Offering Memorandum for our 8.5% senior secured notes due 2018 dated April 10, 2014. We incorporate that section into this announcement. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider such factors to be a complete set of all potential risks or uncertainties. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.