Think Finance Settlement: Final Resolution Leaves More Questions than It Answers as to Future of CFPB EnforcementThe CFPB announced that it settled with Think Finance, LLC and six subsidiaries on February 5. The settlement follows protracted litigation beginning in November 2017 involving the CFPB’s allegations that Think Finance “engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act in connection with the illegal collection of loans that were void in whole or in part under state laws governing interest rate caps, the licensing of lenders, or both.” In particular, the CFPB contended that Think Finance made loans that were either partially or completely void under the law of 17 states.

As background, the CFPB contended that Think Finance performed critical functions for three separate lending businesses: Great Plains Lending, LLC, MobiLoans, LLC, and Plain Green, LLC. According to the CFPB, Think Finance provided “marketing, advertising, hosting websites, routing customer calls, training customer service agents to handle customer calls . . . , monitoring [tribal] employees, providing and maintaining a loan servicing platform, providing and maintaining loan origination software, identifying third party collection agencies, and facilitating the sale of delinquent accounts.” Soon after the CFPB filed its complaint, Think Finance filed for Chapter 11 bankruptcy. Think Finance emerged from bankruptcy in December 2019.

The consent order prohibits Think Finance from operating in 17 states: Arizona, Arkansas, Colorado, Connecticut, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, and South Dakota.  Additionally, Think Finance must pay a $7 penalty (or $1 per subsidiary). However, according to the CFPB, “consumer redress will be disbursed from a fund created as part of the global resolution, which is anticipated to have over $39 million for distribution to consumers and may increase over time as a result of ongoing, related litigation and settlements.”

It is difficult to determine whether the CFPB settled for such a low dollar amount as a result of the bankruptcy matter and the $39 million consumer redress fund or the change in the director and policy at the CFPB. However, the fact that the proposed consent order resulted in prohibiting Think Finance from engaging in lending activities in 17 states raises significant questions for current unlicensed entities operating in those states through different lending models.