CFPB Orders $6.5 Million in Refunds to Service Members for Auto Loans
The CFPB ordered U.S. Bank and its nonbank partner to pay nearly $6.5 million to members of the U.S. military who were misled about terms and fees of their auto loans.
Service members who participated in the Military Installment Loans and Educational Services (MILES) auto loan program operated by U.S. Bank and its nonbank partner, Dealers’ Financial Services (DFS), may benefit from the order by the Consumer Financial Protection Bureau. Service members who have received MILES loans since January 1, 2010 may receive restitution.
U.S. Bank and DFS must return the money to service members because they did not properly disclose an allotment fee charged to participants. The CFPB charges that the companies also misrepresented the true cost and coverage of add-on products financed along with the auto loans.
Under the order, the companies must provide reimbursements to the victims as a bank check in the mail or an account credit. U.S. Bank will pay at least $3.2 million in restitution and DFS will pay $3.3 million to over 50,000 service members for violating the Truth in Lending Act and other laws that prohibit deceptive marketing and lending practices.
The companies are also required to improve disclosures to service members about costs and other material terms of add-on products.