WASHINGTON, July 29 More than 17,000 U.S.
military personnel and other consumers will receive about $92
million in debt relief as part of a settlement over a lender's
alleged improper practices, the U.S. consumer watchdog and 13
states announced on Tuesday.
The Consumer Financial Protection Bureau said Colfax Capital
Corp, which previously operated as Rome Finance Co, and a
subsidiary used mall kiosks near military bases to lure
borrowers into taking out loans to buy computers, televisions
and other consumer products.
But regulators said Colfax hid expensive charges, using
financing agreements that downplayed the costs of its loans.
Under the settlement, Colfax agreed to stop collecting on
outstanding loan agreements.
Regulators also accused Colfax of withholding key
information from billing statements about the annual percentage
rates charged, and unfairly collecting debt that was legally
"Today, their long run of picking the pockets of our
military has come to an ignominious end," CFPB Director Richard
Cordray said in a statement.
Regulators in New York, Colorado, Delaware, Florida,
Georgia, Kentucky, Indiana, Iowa, Massachusetts, Michigan, North
Carolina, Tennessee and Vermont joined in the settlement with
Colfax, which was based in California and Georgia.
"No one who serves our country in uniform, especially during
a time of war, should ever fall victim to predatory financial
practices," U.S. Defense Secretary Chuck Hagel said in a
The settlement also bans Colfax and two owners, Ronald
Wilson and William Collins, from consumer lending, the CFPB
Colfax is being liquidated in bankruptcy court, the consumer
bureau said on its website. Neither the company's bankruptcy
trustee nor a lawyer for Colfax immediately responded to a
request for comment.
(Reporting by Emily Stephenson; Editing by Leslie Adler)