A payday lender is appealing an administrative law judge’s ruling that it should repay $132 million in restitution to individuals who were misled regarding the terms of the loans they originated, were wrongfully required to provide access to their bank accounts, and had money taken from those accounts without their approval.
The Consumer Financial Protection Bureau charged Integrity Advance and its chief executive, John Carnes, back in 2015. In 2016, a different administrative law judge said that the payday lender was liable for $38 million in restitution, but Richard Cordray, the director of the CFPB at the time, rejected the ruling and asked a different judge to rule on the case.
In appealing the judge’s ruling, a lawyer representing Integrity Advance and Carnes said he expects everyone to be “vindicated” and that nobody will have to pay a fine or make restitution.
“We disagree with the Administrative Law Judge’s recommendation,” said Richard Zack, a Philadelphia attorney representing Integrity Advance and Carnes, according to a published report. “We are confident that, at the end of this process, Mr. Carnes and Integrity Advance will be vindicated and found to have no liability.”
The loans in question were originated between 2007 and 2013. The company’s assets were sold, so how much could actually be recovered may be in doubt.
The lender was found to have initiated ACH withdrawals 602 times, taking more than $115,000, after individuals had attempted to revoke authorization for the withdrawals.
In its appeal, the payday lender argued that the statutes of limitation have expired, meaning the director of the CFPB is no longer able to ratify the judge’s recommendations.
