Two Lenders Punished for Actions Against Veterans
Majestic Home Loans shut down and TitleMax fined for misleading military personnel and their families
- Written by Banking Exchange staff
The CFPB has shut down one mortgage lender and fined another $10 million for actions that disadvantaged military families.
California-based RMK Financial — which operates under the Majestic Home Loans brand — has been banned from the mortgage industry after it breached an order from the Consumer Financial Protection Bureau (CFPB).
The order, in place since 2015, related to RMK falsely claiming to be affiliated with the US government. In a statement earlier this week, the CFPB said RMK “engaged in a series of repeat offenses” despite the previous action, including advertising itself using “fake” seals from the Department of Veterans Affairs and the Federal Housing Administration’s logo.
On top of the industry ban, RMK has been ordered to pay $1 million to the CFPB’s victim relief fund.
“Even after the 2015 law enforcement order, RMK continued to lie to military families by falsely implying government endorsement of its home loans,” said CFPB director Rohit Chopra. “Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good.”
The action follows a $10 million fine issued by the CFPB to TMX Finance, also known as TitleMax, for “violating the financial rights of military families and other consumers in providing auto title loans”. It has also been ordered to pay $5 million in consumer relief.
According to the CFPB, TitleMax offered auto title loans — a type of short-term loan secured against a vehicle — to military families despite this practice having been outlawed since 2007. It also charged more than the 36% interest rate cap in place for military personnel and their families on many other loans.
Between October 2016 and September 2021, the CFPB reported that TitleMax had made “at least” 2,670 such title loans, and charged unlawful fees on “about 15,000” loans. Chopra described the company’s actions as “illegal predatory lending”.
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