On August 10, 2018, the Bureau of Consumer Financial Protection announced that a federal district court in the Western District of Missouri approved a consent order in a case against a set of twenty corporate entities and two individual principals (collectively, “Hydra Group”). The BCFP alleged violations of the Consumer Financial Protection Act of 2010 (“CFPA”), the Truth in Lending Act (“TILA”), the Electronic Fund Transfer Act (“EFTA”), and implementing regulations.

According to the Bureau, Hydra Group used third parties to obtain personal and financial information that enabled the defendants to access consumers’ bank accounts without authorization.  Hydra Group would then deposit loans into the accounts and debit purported finance charges indefinitely.  Some consumers received loan documents, but those allegedly misrepresented the cost and terms of the loans.

The order bans the defendants from further business, requires a forfeiture of approximately $14 million in assets, and a suspended judgment for $69.6 million in restitution.  Due to defendants’ inability to pay, the order requires a $1 civil money penalty.

Consumers who cannot obtain relief from the defendants may be able to receive compensation from the Bureau’s Civil Penalty Fund.