The Consumer Financial Protection Bureau (CFPB) yesterday issued a consent order against Omni Financial of Nevada, Inc. (Omni). The Bureau found that Omni violated the Military Lending Act (MLA), Electronic Fund Transfer Act (EFTA), and Consumer Financial Protection Act of 2010 (CFPA) in connection with making installment loans, according to a CFPB press release. Omni, which has its principal place of business in Las Vegas, Nevada, and operates using the names Omni Financial and Omni Military Loans, specializes in lending to consumers affiliated with the military. It originates tens of thousands of loans each year, with individual loans typically ranging from $500 to $10,000. The consent order requires that Omni pay a $2.175 million civil money penalty and imposes injunctive relief to stop ongoing violations and prevent future violations. The CFPB found that, since October 2016, Omni’s loans to covered borrowers violated the MLA’s prohibition of requiring repayment by allotment. The CFPB also found that Omni violated EFTA and the CFPA. In addition to lending to active-duty servicemembers and their dependents, Omni lends to civilians and non-covered servicemembers, such as military retirees. The Bureau found that Omni requires all of its borrowers to provide bank-account information and authorize Omni to withdraw funds from that account on the first business day after each missed payment. Omni’s requirement that consumers allow it to withdraw funds from their bank accounts violates EFTA’s prohibition against requiring consumers to preauthorize electronic fund transfers as a condition of receiving credit. The CFPB further found that these EFTA violations constituted CFPA violations.
