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The Consumer Financial Protection Bureau (CFPB) on Wednesday filed a lawsuit in federal court against auto-loan servicer USASF Servicing (USASF) for a host of illegal practices that harmed individuals with auto loans, according to a CFPB press release. These practices include wrongfully disabling borrowers’ vehicles, improperly repossessing vehicles, double-billing borrowers for insurance premiums, and failing to return millions of dollars in refunds to consumers. The CFPB is seeking to obtain redress for consumers and civil money penalties and stop any future violations. “The CFPB is suing USASF for a range of misconduct, including illegally activating devices that prevented borrowers from starting their cars,” said CFPB Director Rohit Chopra. “Given the rising cost of cars during the pandemic and jump in auto loan debt across the country, the CFPB is working to root out illegal activity in this market.” USASF is an auto-loan servicer headquartered in Lawrenceville, Georgia. USASF serviced auto loans that were originated by an affiliate, U.S. Auto Sales, Inc., which was a buy-here-pay-here auto dealer and lender with 31 dealerships in the Southeast. USASF offered both Guaranteed Asset Protection and collateral-protection insurance, which are products that consumers can buy when they buy or lease a car. In April 2023, U.S. Auto Sales wound down most of its businesses.

There were 362 commercial chapter 11 filings registered in July 2023, an increase of 71 percent from the 212 filings registered in July 2022, according to data provided by Epiq Bankruptcy, the leading provider of U.S. bankruptcy filing data. Overall commercial filings increased 21 percent to 1,961 in July 2023, up from the 1,621 commercial filings registered in July 2022. Small business filings, captured as subchapter V elections within chapter 11, increased 61 percent to 153 in July 2023, up from 95 in July 2022. Total bankruptcy filings were 35,716 in July 2023, a 15 percent increase from the July 2022 total of 30,862. Individual bankruptcy filings totaled 33,755 in July 2023, registering a 16 percent increase from the July 2022 filing 29,241 total. There were 19,476 individual chapter 7 filings in July, a 17 percent increase versus 16,645 in July 2022 and there were 14,229 individual chapter 13 filings in July, a 13 percent increase over the 12,547 filings the previous year.

A Florida doctor accused of taking kickbacks from Insys Therapeutics to prescribe its fentanyl spray should face a civil trial despite his recent bankruptcy, federal prosecutors are arguing, even as a judge delayed it from going forward, Reuters reported. In a filing Wednesday in Tampa federal court, lawyers for the Middle District of Florida U.S. Attorney's Office said their civil lawsuit against Edward Lubin stems from the government's "police or regulatory power," and so was not automatically paused like most legal claims against a newly bankrupt debtor. They noted that federal appeals courts in other cases have ruled that lawsuits brought by the government under the federal False Claims Act, like the one against Lubin, are examples of police or regulatory power. Lubin had notified the court of his chapter 11 bankruptcy earlier on Wednesday, saying it should halt the case. His lawyer did not immediately respond to a request for comment. U.S. District Judge Thomas Barber, who is presiding over the case, said in an order on Thursday that he would wait for the bankruptcy court to decide whether the trial can go forward. For now, he put the Aug. 2 trial date on hold.