CFPB Enter Consent Order with Loan Broker Greensky to Cancel or Refund Void Predatory Loans

The CFPB issued a consent order against GreenSky requiring the company to refund or cancel up to $9M in void, fraudulent, predatory loans.

Loan Broker Greensky to Refund Illegal Loans. Thirteen Years Later, American Homeowners are Still Waiting for Their Void Predatory Loans to be Cancelled.

JUL 12, 2021 | REPUBLISHED BY LIT: JUL 17, 2021

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) took action against GreenSky, LLC for enabling contractors and other merchants to take out loans on behalf of thousands of consumers who did not request or authorize them.

The CFPB issued a consent order against GreenSky requiring the company to refund or cancel up to $9 million in loans for customers harmed by its illegal conduct, pay a $2.5 million civil penalty, and implement new procedures to prevent future fraudulent loans.

“GreenSky’s careless business and customer service practices enabled its merchants to take advantage of vulnerable consumers who needed financial help to repair their homes and to pay for other critical retail services by setting up loans without consumers’ consent,”

said CFPB Acting Director Dave Uejio.

“For consumers to wind up in debt to GreenSky for loans they never knew about is simply wrong. The CFPB will not stand for practices that allow conduct like this in the marketplace.”

GreenSky, a non-bank institution headquartered in Atlanta, used merchants, primarily those providing home improvements, to promote and offer financing to customers before making on-the-spot lending decisions based on criteria provided by its partner banks.

Proceeds from GreenSky’s loans, ranging from a few thousand to tens of thousands of dollars, bypass consumers and are disbursed directly to merchants following the merchants’ application for payment.

Some consumers complained that they never applied for a loan or even heard of GreenSky before receiving billing statements, collection letters, and calls from the company.

Processing and Enabling Unauthorized Loans

The CFPB found that GreenSky engaged in unfair practices against their customers in violation of the Consumer Financial Protection Act of 2010 (CFPA). The violations involved the company’s loan origination and servicing activities, which included:

Processing and servicing unauthorized loans: GreenSky serviced and facilitated the origination of loans to consumers who did not request or authorize them.

Between 2014 and 2019, GreenSky received at least 6,000 complaints from consumers who stated they did not authorize submission of a loan application.

The company’s complaint investigations found that in at least 1,600 instances its merchants were at fault.

Structuring the GreenSky Program in a manner that enabled unauthorized loans: GreenSky failed to create and implement appropriate and effective controls during the loan application, approval, and funding processes, failed to implement adequate merchant training and oversight, and neglected to effectively manage consumer complaints.

Enforcement Action

Under the CFPA, the CFPB has the authority to take action against institutions violating federal consumer financial laws, including by engaging in unfair, deceptive, or abusive acts or practices. The consent order issued today requires GreenSky to:

Refund and cancel loans for harmed consumers: GreenSky will provide up to $9 million in cash refunds and loan cancellations.

Pay a civil penalty: GreenSky will pay $2.5 million to the CFPB, which will be deposited into the CFPB’s Civil Penalty Fund

Prevent future abuses: GreenSky is required to prevent future illegal practices by verifying consumers’ identities and confirming their authorizations prior to activating loans or disbursing loan proceeds.

GreenSky must also implement an effective consumer complaint management program, exercise effective oversight of third-party merchant partners, and implement consistent standards to govern the write-off of illegal loans.

Shameful: Billions in Damages to US Gov for 2008 Toxic Loans, Zero for the Real Victims, Homeowners

Residential Capital (RESCAP) was effectively a U.S. Gov backed lender. They wanted damages post 2008 and have spent 13 plus years litigating.

Predatory Lending: The Ultimate Betrayal of Elder Citizens Post 2008 by the American Government

Greed: The greatest theft of American’s homes was decided after the 2008 financial crisis where banks were bailed out and homeowners evicted.

2022 Ends with Investigation into Andrew P. Lehman, CFLA, Lehman Brothers LLC, Lehman Data Analytics et al

This is a new article. It will be updated frequently. Bookmark as LIT reviews Andrew Lehman, post CFPB settlement.

CFPB Enter Consent Order with Loan Broker Greensky to Cancel or Refund Void Predatory Loans
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Laws In Texas first started as an independent investigative blog about the Financial Crisis and how the Banks and Government are colluding against the citizens and homeowners of the State of Texas, relying upon a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. That stated, LIT's Blog has grown tremendously during the three or so years it has been operating and our reach is now nationwide as we expand via our micro-blogs in various states. Join us as we strive to bring back justice and honor to our Judiciary and Government employees, paid for by Citizens.

Donate to LawsInTexas. Make a Difference.

Subscribe to Our Newsletter

We keep your data private and share your data only with third parties that make this service possible. See our Privacy Policy for more information.

© 2020-2023 LawInTexas com is an online trading name which is wholly owned by Blogger Inc., a nonprofit 501(c)(3) registered in Delaware. | All Rights Reserved.

To Top