A loan broker who the Consumer Financial Protection Bureau says deceived veterans about loans to be repaid by their pensions will pay only a $1 civil penalty. However, he is continuing to cooperate with the Bureau’s investigation of the scheme.
An online loan broker has agreed to settle Consumer Financial Protection Bureau charges that he arranged high-interest rate loans to veterans that violated a federal law ban on assigning veteran pension payment rights. The individual also misrepresented the nature of the transactions, when the veterans would receive the funds, and the interest rate they would pay, according to the Bureau. The broker has agreed to the entry of a consent order but has not admitted any wrongdoing.
Deceiving veterans. According to the consent order, Mark Corbett operated a website that was used to connect veterans with companies that would offer them high-interest loans. Under the resulting agreement, a veteran would receive a single payment from a company in exchange for assigning some or all of his pension payments to the company for as long as 10 years. Veterans also were required to buy life insurance to ensure the money they received was repaid.
Federal law prohibits agreements under which the right to receive a veteran’s pension payment is assigned to someone else, the order says (38 U.S.C. §5301(a)(3)(C)).
The Bureau says that Corbett violated the Consumer Financial Protection Act by:
- misrepresenting that the transactions were legal and enforceable;
- misrepresenting that the transactions were the purchase of a product, rather than a loan;
- misrepresenting how quickly the veteran would receive the funds; and
- failing to disclose the interest rates being charged for the loans.
Consent order terms. Corbett will pay a civil penalty of only $1, based on his financial situation. However, he also must help the CFPB identify and locate each veteran who was harmed and determine the amount of the individual’s loss. He also must provide information, testimony, and evidence to assist the Bureau’s ongoing investigation.
Neither the Bureau’s press release nor the consent order identifies the companies that made the loans. In the order, they are referred to only as "the Doe Companies."
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