U.S. Bank Must Refund $6.5 Million To Troops Due To Shady Car Loans
Thursday, June 27, 2013
An estimated 50,000 U.S. military service members will receive refunds from U.S. Bank and one of its partners because of deceptive car loans the bank and its partner offered the military community.
The Consumer Financial Protection Bureau is ordering U.S. Bank and Dealers Financial Services to return about $6.5 million to service members.
American Forces Press Service estimates each service member due a refund will get an average of $100.
CFPB Director Richard Cordray said of U.S. Bank and DFS:
“We’ve determined that the companies developed a joint program that engaged in deceptive marketing and lending practices while providing subprime auto loans to tens of thousands of active-duty military members."
U.S. Bank and DFS created the Military Installment Loans and Educational Services program (MILES) to sell subprime auto loans specifically to active-duty military. Cordray said the companies failed to disclose to troops details about the total payments for the loans, additional finance charges, and the annual percentage rate.