Contact: Stephen Rouzer, srouzer@nclc.org, (202) 595-7847
WASHINGTON, D.C. – The Federal Deposit Insurance Corp. (FDIC) announced a settlement with the Bank of Lake Mills in Wisconsin and two affiliated lenders, Freedom Stores and Military Credit Services, over unfair and deceptive lending practices targeting servicemembers and veterans. The FDIC’s settlement follows actions taken against the lenders by the Consumer Financial Protection Bureau in 2014 and 2016.
“Through its Office of Servicemember Affairs, the CFPB has acted as the first line of defense for veterans and active-duty servicemembers–taking on financial service providers who prey on our women and men in uniform,” said Lauren Saunders, associate director of the National Consumer Law Center.
Freedom Stores, a furniture and electronics retailer that caters to military members and offers in-store financing, was fined by the CFPB in 2014 for illegal debt collection practices. Military Credit Services, a consumer credit lender that makes in-store loans, was fined by the CFPB in 2014 for illegal debt collection practices and again in 2016 for improper contract disclosures.
On Thursday, the Bank of Lake Mills and the two affiliates agreed to pay restitution of about $3 million and fines totaling $242,000 to settle accusations of unfair and deceptive practices spanning from 2013 to 2015 and targeting military servicemembers and their families.
The FDIC said the companies violated the Federal Trade Commission Act by, among other things, charging interest on “six months interest-free” loans to consumers who paid off their loans within six months and failing to disclose terms of add-on products.
“It’s outrageous that these companies continue to gouge our troops and their families, and it points to the need for increased consumer protections. We commend the CFPB’s diligence and quick action in spotting and acting on these problems early, and the FDIC for following up with this recent settlement,” added Saunders.
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Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has used its expertise in consumer law and energy policy to work for consumer justice and economic security for low-income and other disadvantaged people, including older adults, in the United States. NCLC’s expertise includes policy analysis and advocacy; consumer law and energy publications; litigation; expert witness services, and training and advice for advocates. NCLC works with nonprofit and legal services organizations, private attorneys, policymakers, and federal and state government and courts across the nation to stop exploitative practices, help financially stressed families build and retain wealth, and advance economic fairness. www.nclc.org
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Stephen Rouzer
Sr. Communications and Campaigns Strategist
National Consumer Law Center
1001 Connecticut Ave., NW, Suite 510
Washington, DC 20036
(202) 595-7847 (office)
(850) 603-9216 (cell)
@StephenRouzer
www.nclc.org
