USA Discounters, Ltd.
Documents in this case
- Consent order · · 21 p.
- Stipulation · · 4 p.
Case summary
CFPB took action against a servicemember fee scam run by USA Discounters, Ltd., a company that operates a chain of retail stores near military bases and offers financing for purchases.
Consent order ()
PDF of this document (21 pages)
Page 2
UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU
ADMINISTRATIVE PROCEEDING File No. 2014-CFPB-
In the Matter of:
USA Discounters, Ltd.
CONSENT ORDER
The Consumer Financial Protection Bureau (“Bureau”) has reviewed the practices of Respondent USA Discounters, Ltd. relating to its extension of credit and has identified violations of law. Under Sections 1053 and 1055 of the Consumer Financial Protection Act of 2010 (“CFPA”), 12 U.S.C. §§ 5563 and 5565, the Bureau hereby issues this Consent Order (“Order”).
I.
Overview
The Bureau finds that USA Discounters has engaged in violations of Sections
1031 and 1036 of the CFPA (collectively, “Section 1036”), 12 U.S.C. §§ 5531, 5536, in connection with a fee that it charged members of the United States Armed Forces as a condition of credit.
II.
Jurisdiction
1.
The Bureau has jurisdiction over this matter pursuant to Sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563, 5565.
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III.
Stipulation
2.
USA Discounters has executed a “Stipulation and Consent to the Issuance of Consent Order,” dated August 11, 2014 (“Stipulation”), which is incorporated by reference and is accepted by the Bureau. By this Stipulation, USA Discounters has consented to the issuance of this Order by the Bureau pursuant to Sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563 and 5565, without admitting or denying any findings of fact or violations of law, except that USA Discounters admits the facts necessary to establish the Bureau’s jurisdiction over USA Discounters and the subject matter of this action.
IV.
Definitions
3.
For purposes of this Order, the following definitions shall apply:
a.
“Effective Date” shall mean the date on which the Order is issued.
b.
“Eligible Consumers” shall mean any current or former member of the United States Armed Forces who paid or has been obligated to pay one or more $5 “SCRA Specialists fee” in connection with credit that USA Discounters offered and sold during the Relevant Time Period. c.
“Enforcement Director” shall mean the Assistant Director of the Office of
Enforcement for the Consumer Financial Protection Bureau.
d.
“Related Consumer Action” shall mean a private action by or on behalf of one or more consumers or an enforcement action by another governmental entity, brought against USA Discounters based on substantially the same facts as set forth in Section V of this Order. 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 2 of 21
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e.
“Relevant Time Period” shall include the period from January 1, 2009 through the Effective Date of this Order.
f.
“USA Discounters” means “USA Discounters, Ltd.” and its affiliates, successors, and assigns, by whatever names they might be known. BUREAU FINDINGS AND CONCLUSIONS
V.
General
The Bureau finds the following:
4.
USA Discounters, Ltd. is a privately held company that operates a chain of retail stores selling furniture, electronics, bedding, and appliances from storefronts nationwide, mostly located within a few miles of military installations. 5.
From each of its locations, USA Discounters offers credit to finance the purchase of merchandise through a retail installment contract, often titled Consumer Retail Installment Contract and Security Agreement (“Installment Contract”). 6.
For members of the U.S. Armed Forces, USA Discounters has provided a version
of the Installment Contract that includes a provision titled “Military Service, Home State,” which acknowledges the servicemember is on “active duty status in the U.S. Military.” The provision also states that the servicemember agrees that “an independent company, SCRA SPECIALISTS, LLC of Norfolk, Virginia . . . may perform an investigation to verify the facts and representations” relating to the servicemember’s duty status in the military. 7.
As a prerequisite for entry into the Installment Contract, servicemembers must
sign an attached agreement titled “Military Services Addendum” (“the
Addendum”). The Addendum acknowledges that the servicemember is an active 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 3 of 21
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duty member of the U.S. Armed Forces and reserves the servicemember’s rights and protections under section 524 of the Servicemembers Civil Relief Act (“SCRA”), 50 U.S.C. app. § 524. Among other rights granted to servicemembers, section 524 states that a court may stay the execution of any judgment or order entered against the servicemember and vacate or stay an attachment or garnishment of property, money, or debts in the possession of the servicemember when, in the opinion of the court, the servicemember is materially affected by reason of military service in complying with the court judgment or order. 8.
The Addendum also states that the servicemember, referenced as the “Buyer,”
agrees to “engage the services of SCRA Specialists, LLC, an independent company, . . . to represent and assist Buyer in specified matters related to compliance with the SCRA.” That statement is located within a provision that is titled “SELLER TO RECOGNIZE SCRA SPECIALISTS, LLC AS BUYER’S REPRESENTATIVE” (all caps in original).
9.
The Addendum also references three services that SCRA Specialists may perform
as a representative for servicemembers:
a.
USA Discounters “may, but is not required to send to SCRA Specialists any notice pursuant to the provisions of the SCRA arising out of Buyer’s default under this Contract”;
b.
USA Discounters “may seek verification of Buyer’s active military status for purposes of the SCRA by contacting SCRA Specialists who will either provide the status last provided to it by Buyer or obtain a certificate or Military Status report from the Department of Defense pursuant to 50 USC App. § 582”; and 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 4 of 21
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c.
USA Discounters agrees to “accept and implement address changes for
Buyer from SCRA Specialists.”
10.
In addition to the Installment Contract and the Addendum, USA Discounters provides servicemembers an agreement on behalf of SCRA Specialists, titled the “Representative Agreement.” The Representative Agreement acknowledges that the servicemember, as an active duty member of the military, is afforded certain rights and protections by the SCRA. The Representative Agreement also states that the servicemember “may have to deploy, transfer or otherwise vacate the [customer’s current address] . . . such that he or she may not be available to complete or comply with the provisions of the SCRA or receive its benefits. Accordingly, the Servicemember desires to engage SCRA Specialists to serve as a representative for specified purposes as stated in this Agreement.” 11.
The SCRA Specialists’ Representative Agreement, like the Addendum to the
Installment contract, describes the services that SCRA Specialists may perform as a “representative” for the servicemember:
a.
“Servicemember hereby appoints SCRA Specialists as his or her representative that may receive any notices required by the SCRA with respect to the USA Discounters Contract”;
b.
“Servicemember agrees to provide SCRA Specialists, LLC written notification of any changes to the above address of Servicemember and SCRA Specialists, in turn, agrees to provide any such address changes to USA Discounters”; and 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 5 of 21
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c.
“SCRA Specialists also agrees to obtain verification of Servicemember’s active military status for purposes of the SCRA should it be requested to do so by USA Discounters.”
12.
Ostensibly in exchange for the offered services, USA Discounters charges the servicemember a $5 “SCRA Specialists fee.” The SCRA Specialists fee is assessed by USA Discounters on its installment contracts and, in turn, USA Discounters remits $4.50 of each $5 fee monthly to SCRA Specialists. USA Discounters has charged the $5 fee in connection with more than 70,000 contracts, generating more than $350,000 since 2009.
13.
Taken together, the Installment Contract, the Addendum, and the Representative
Agreement communicate to servicemembers that SCRA Specialists is an independent agent working on the servicemembers’ behalf. In actuality, however, SCRA Specialists was financially dependent on USA Discounters because its sole source of revenue was through customers of USA Discounters. Moreover, while USA Discounters portrays that its $5 fee is for “representative” services performed by SCRA Specialists on behalf of servicemembers, SCRA Specialists did not provide any representational services to servicemembers. 14.
Although USA Discounters represented to consumers that it “may seek
verification of Buyer’s active military status for the purposes of the SCRA by contacting SCRA Specialists,” it routinely performed its own duty status verifications, without assistance from SCRA Specialists, in order to satisfy the SCRA’s obligation to “file with the court an affidavit . . . stating whether or not the defendant is in military service” before it could obtain default judgments against customers. 50 U.S.C. app. § 521(b)(1)(A). Accordingly, USA Discounters 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 6 of 21
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misrepresented performance of duty status verification as a benefit to servicemembers performed by SCRA Specialists when in fact USA Discounters performed the duty status verification on its own to advance its own interests. In addition, USA Discounters never actually asked SCRA Specialists to verify any servicemember’s active duty status, thereby rendering the purported service illusory.
15.
USA Discounters also represented to consumers that it “may, but is not required
to send to SCRA Specialists any notice pursuant to the provisions of the SCRA arising out of Buyer’s default under [the USA Discounters] Contract.” This claim could create a false impression that SCRA Specialists is authorized to receive actual service of process on servicemembers’ behalf. In fact, SCRA Specialists is not authorized to receive service of process on a servicemember’s behalf. Moreover, USA Discounters never sent any notices to SCRA Specialists in regard to default and SCRA Specialists never performed any action on a servicemember’s behalf with regard to default, thereby rendering the $5 fee illusory.
16.
USA Discounters required its customers to send address changes to SCRA
Specialists, and represented that it would accept customer address changes forwarded by SCRA Specialists. This purported service was of little ascertainable benefit to servicemembers because servicemembers could just as easily provide an updated address directly to USA Discounters; SCRA Specialists’ involvement provides no representational service to servicemembers. 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 7 of 21
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Findings and Conclusions as to Unfairness
17.
USA Discounters is a “covered person” as that term is defined by 12 U.S.C. §
5481(6).
18.
Section 1036(a)(1)(B) of the CFPA prohibits covered persons from engaging in
“unfair, deceptive, or abusive” acts or practices (“UDAAP”). 12 U.S.C. §
5536(a)(1)(B).
19.
An act or practice is unfair under the CFPA if it (a) causes or is likely to cause substantial injury to consumers; (2) such injury is not reasonably avoidable by consumers; and (3) such injury is not outweighed by countervailing benefits to consumers or to competition. 12 U.S.C. § 5531(c). 20.
As described in Paragraphs 4 through 16, USA Discounters’ acts and practices
during the Relevant Time Period caused or were likely to cause substantial injury, including consumers’ financing and/or payment of the $5 SCRA Specialists fee in exchange for services that were never provided or had no representational value. The injury was not reasonably avoidable by consumers nor outweighed by any countervailing benefits to consumers or to competition. 21.
Accordingly, USA Discounters engaged in unfair acts and practices in violation of
the CFPA, 12 U.S.C. §§ 5531, 5536.
Findings and Conclusions as to Deception
22.
An act or practice may be considered “deceptive” under the CFPA if it (1) misleads or is likely to mislead the consumer; (2) the consumer’s interpretation of the act or practice is reasonable under the circumstance; and (3) the misleading act or practice is material.
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23.
As described in Paragraphs 4 through 16, USA Discounters made material misrepresentations during the Relevant Time Period, expressly or by implication, that were likely to mislead consumer acting reasonably under the circumstances into believing that SCRA Specialists is independent from USA Discounters and that SCRA Specialists performed services on behalf of consumers relating to compliance with and obtaining benefits of the SCRA. 24.
Accordingly, USA Discounters engaged in deceptive acts and practices in
violation of the CFPA, 12 U.S.C. §§ 5531, 5536.
CONDUCT PROVISIONS
VI.
Order to Cease and Desist
IT IS HEREBY ORDERED, pursuant to Sections 1053 and 1055 of the CFPA,
12 U.S.C. §§ 5563 and 5565, that:
25.
Subject to the terms and limitations in Paragraph 58, USA Discounters and its affiliates, officers, agents, representatives, and employees shall cease and desist from:
a.
Engaging in the unfair and deceptive acts or practices described in Section
V of this Order;
b.
Offering the performance, in exchange for a fee, of any service relating to the Servicemembers Civil Relief Act involving a contract for credit for which USA Discounters is a creditor or assignee; and c.
Accepting any payment in exchange for the performance of any service relating to the Servicemembers Civil Relief Act involving a contract for credit for which USA Discounters is a creditor or assignee. 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 9 of 21
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MONETARY PROVISIONS
VII.
Order to Pay Redress
IT IS FURTHER ORDERED that:
26.
Within 90 days of the Effective Date, USA Discounters shall make full restitution to all Eligible Consumers for the total amount of the $5 SCRA Specialists fees that each Eligible Consumer paid or has been obligated to pay, plus interest, in connection with credit that USA Discounters extended during the Relevant Time Period.
27.
USA Discounters shall make restitution to Eligible Consumers in accordance with the preceding paragraph, as follows:
a.
For Eligible Consumers with any installment accounts in repayment, USA Discounters shall credit the consumer’s account in the amount of all $5 SCRA Specialists fees paid or obligated to be paid, plus interest accrued on such fees;
b.
For Eligible Consumers who repaid their installment account(s) (with no other installment account currently in repayment), USA Discounters shall mail a check (valid for 180 days) for the full amount of the $5 SCRA Specialists fees paid by each Eligible Consumer, plus interest paid on such fees;
c.
With respect to any installment account charged off to collection or which
resulted in a repossession or return, USA Discounters shall discharge from the overdue amount(s) all $5 SCRA Specialists fees plus interest paid or accrued through the date of the charge off, repossession or return; and 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 10 of 21
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d.
USA Discounters shall send to all Eligible Consumers by letter or email to the most recent address on record a notice approved in advance by the Bureau explaining the restitution provided to them. 28.
USA Discounters shall make reasonable attempts to locate Eligible Consumers.
29.
For any Eligible Consumer who is eligible with respect to more than one $5
Specialist fee, the Eligible Consumer’s restitution will be determined for each installment account separately. No Eligible Consumer shall be precluded from receiving restitution with respect to more than one $5 SCRA Specialists fee. 30.
USA Discounters shall not attach any conditions to the restitution provided to
Eligible Consumers, including requiring consumers to waive any rights.
31.
USA Discounters shall not be obligated to make restitution for any amount that was discharged or refunded prior to the Effective Date. 32.
With respect to any Eligible Consumer’s account that receives restitution as a
credit that decreases the existing balance or charged-off balance, USA Discounters shall as permitted by law and in accordance with existing procedures:
a.
Report the updated balance to each credit reporting agency to which USA
Discounters had previously furnished balance information for the account;
or
b.
Delete the account tradeline at each credit reporting agency to which USA Discounters had previously furnished balance information for the account; or c.
In the case of an account sold to an unaffiliated third party, request that such third party owner of the debt report the updated balance to, or delete 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 11 of 21
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the account tradeline at, each credit reporting agency to which USA Discounters or the third party owner of the debt had previously furnished balance information for the account.
33.
Ninety days from the Effective Date, USA Discounters shall submit to the Enforcement Director a report with an assessment of its compliance with the terms of Paragraphs 26 through 32 (“Restitution Report”). The Restitution Report shall include:
a.
A description of the methodology used to determine the population of
Eligible Consumers;
b.
The total number of Eligible Consumers to whom it reimbursed a $5 SCRA Specialists fee, broken down by method of reimbursement; c.
The total amounts reimbursed to Eligible Consumers, broken down by the principal amounts and interest;
d.
The total number of installment contracts for which the Eligible
Consumers were reimbursed;
e.
The total number of Eligible Consumers who were not provided restitution;
f.
The total amount that was not reimbursed;
g.
A description of the efforts made to locate and reimburse the Eligible
Consumers in subpart (e);
h.
A description of the procedures used to issue and track reimbursement of payments; and i.
The procedures used for reporting and requesting the reporting of updated balances to credit reporting agencies.
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VIII.
Undeliverable Restitution Payments
34.
For any restitution payment to an Eligible Consumer that USA Discounters is unable to deliver despite reasonable attempts or that goes unclaimed if a check was issued, USA Discounters shall remit the payment to the Eligible Consumer’s state of domicile pursuant to the Uniform Unclaimed Property Act or related state laws within 300 days of the Effective Date. 35.
All amounts that are not accepted by the Eligible Consumer’s state of domicile
under the preceding paragraph shall be paid by USA Discounters as disgorgement in the form of a wire transfer to the Bureau or such agent as the Bureau may direct, and in accordance with wiring instructions to be provided by counsel for the Bureau, within 330 days from the Effective Date. Any funds paid to the Bureau under this paragraph shall be deposited in the U.S. Treasury as disgorgement.
36.
Within 330 days from the Effective Date, USA Discounters shall submit to the
Enforcement Director a report with an assessment of its compliance with the terms of the preceding paragraph (“Final Restitution Report”). The Final Restitution Report shall include:
a.
The total number of Eligible Consumers to whom it reimbursed a $5 SCRA Specialists fee, broken down by method of reimbursement; b.
The total amount reimbursed to Eligible Consumers;
c.
The total number of installment contracts for which the Eligible
Consumers were reimbursed;
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d.
The total number of Eligible Consumers whose restitution payment was submitted to the Eligible Consumer’s state of domicile pursuant to the Uniform Unclaimed Property Act or related state laws pursuant to Paragraph 34 of this Order;
e.
The total amount of restitution that was submitted to the Eligible
Consumer’s state of domicile pursuant to the Uniform Unclaimed Property
Act or related state laws pursuant to Paragraph 34 of this Order;
f.
A description of the efforts made to locate and reimburse the Eligible
Consumers in subpart (d);
g.
A description of the procedures used to issue and track reimbursement of payments;
h.
The procedures used for reporting and requesting the reporting of updated balances to credit reporting agencies; and i.
The total amount disgorged by USA Discounters in accordance with
Paragraph 35 of this Order.
IX.
Order To Pay Civil Money Penalties
IT IS FURTHER ORDERED that:
37.
Pursuant to Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the violations of law set forth in Section V of this Order, and taking into account the factors set forth in 12 U.S.C. § 5565(c)(3), USA Discounters shall pay a civil 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 14 of 21
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money penalty of $50,000 to the Bureau, as directed by the Bureau and as set forth herein (“Civil Money Penalty”).
38.
Within 10 days of the Effective Date, USA Discounters shall pay the Civil Money Penalty in the form of a wire transfer to the Bureau or to such agent as the Bureau may direct, and in accordance with wiring instructions to be provided by counsel for the Bureau.
39.
The Civil Money Penalty paid pursuant to this Order shall be deposited in the
Civil Penalty Fund of the Bureau in accordance with Section 1017(d) of the CFPA,
12 U.S.C. § 5497(d).
40.
To preserve the deterrent effect of the Civil Money Penalty, in any Related Consumer Action, USA Discounters shall not argue that USA Discounters is entitled to, nor shall USA Discounters benefit by, any offset or reduction of any monetary remedies imposed in the Related Consumer Action, by any amount of the Civil Money Penalty paid in this action (“Penalty Offset”). If the court in any Related Consumer Action grants such a Penalty Offset, USA Discounters shall, within 10 days after entry of a final order granting the Penalty Offset, notify the Enforcement Director in writing, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment shall not be deemed an additional Civil Money Penalty and shall not be deemed to change the amount of the Civil Money Penalty imposed in this action.
41.
USA Discounters shall treat the Civil Money Penalty as a penalty paid to the
government for all purposes. Regardless of how the Bureau ultimately uses those funds, USA Discounters shall not:
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a.
Claim, assert, or apply for a tax deduction or tax credit with regard to any federal, state, or local tax for any Civil Money Penalty paid under this Order; or b.
Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made pursuant to any insurance policy, with regard to any Civil Money Penalty paid under this Order.
X.
Additional Monetary Provisions
IT IS FURTHER ORDERED that:
42.
In the event of any default on USA Discounters’ obligation to make payment under this Order, interest, computed pursuant to 28 U.S.C. § 1961, as amended, shall accrue on any outstanding amounts not paid from the date of default to the date of payment, and shall immediately become due and payable. 43.
USA Discounters shall relinquish all dominion, control, and title to the funds
paid to the fullest extent permitted by law and no part of the funds shall be returned to USA Discounters.
44.
In accordance with 31 U.S.C. § 7701, USA Discounters, unless it already has done so, shall furnish to the Bureau its taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Order.
45.
Within 30 days of the entry of a final judgment, consent order, or settlement in a Related Consumer Action, USA Discounters shall notify the Enforcement Director of the final judgment, consent order, or settlement in writing. That 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 16 of 21
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notification shall indicate the amount of redress, if any, that USA Discounters paid or is required to pay to consumers and should describe the consumers or class of consumers to whom that redress has been or will be paid. COMPLIANCE PROVISIONS
XI.
Order Distribution and Acknowledgment
IT IS FURTHER ORDERED that,
46.
Within 30 days of the Effective Date, USA Discounters shall deliver a copy of this Order to each of its board members and executive officers, as well as to any managers, employees, Service Providers, or other agents and representatives who have responsibilities related to the subject matter of the Order. 47.
For a period of five years from the Effective Date, USA Discounters shall deliver a
copy of this Order to any future board members and executive officers, as well as to any managers, employees, Service Providers, or other agents and representatives who will have responsibilities related to the subject matter of the Order before they assume their responsibilities. 48.
USA Discounters shall secure a signed and dated statement acknowledging
receipt of a copy of this Order, with any electronic signatures complying with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Order pursuant to this Section. XII.
Recordkeeping
IT IS FURTHER ORDERED that USA Discounters shall create, for at least five years from the Effective Date, and then retain, for at least five years, and make available 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 17 of 21
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to Bureau representatives upon request, the following business records:
49.
All documents and records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Bureau. 50.
All documents and records pertaining to the redress set forth in Sections VII and
VIII above.
51. For each individual Eligible Consumer: the consumer’s name, address, phone number, email address, a copy of the loan agreement(s), and the amount(s) of SCRA Specialists fees paid and/or owed by the consumer. 52.
All consumer complaints and refund requests relating to the $5 SCRA Specialists
fee (whether received directly or indirectly, such as through a third party), and any responses to those complaints or requests.
XIII.
Notices
53.
Unless otherwise directed in writing by a Bureau representative, all submissions, requests, communications, consents or other documents relating to this Order shall be in writing and shall be sent by overnight courier (not the U.S. Postal Service), as follows:
Anthony Alexis, Assistant Director for Enforcement
Consumer Financial Protection Bureau
ATTENTION: Office of Enforcement
1700 G Street, N.W.
Washington D.C. 20552 The subject line shall begin: In re USA Discounters, Ltd., File No. 2014- CFPB-[Docket #].
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Provided however that USA Discounters may send such reports or notifications by first-class mail, but only if USA Discounters contemporaneously sends an electronic version of such report or notification to [email protected].
XIV.
Compliance and Extensions of Time
IT IS FURTHER ORDERED that:
54.
Upon a written showing of good cause, the Enforcement Director may, in his/her discretion, modify any non-material provisions of this Order (e.g., reasonable extensions of time). Any such modification by the Enforcement Director shall be in writing.
ADMINISTRATIVE PROVISIONS
XV.
Administrative Provisions
55.
The provisions of this Order shall not bar, estop or otherwise prevent the Bureau, or any other federal or state agency or department from taking any other action against USA Discounters.
56.
The Bureau releases and discharges USA Discounters from all potential liability for violations of law that have been or might have been asserted by the Bureau based on the practices described in Section V of this Consent Order, to the extent such practices occurred prior to Effective Date and are known to the Bureau as of the Effective Date. Notwithstanding the foregoing, the Bureau may use the practices described in this Consent Order in future enforcement actions against USA Discounters and its affiliates, including, without limitation, to establish a 2014-CFPB-0011 Document 1 Filed 08/14/2014 Page 19 of 21
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pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release shall not preclude or affect any right of the Bureau to determine and ensure compliance with the terms and provisions of the Consent Order, or to seek penalties for any violations of the Consent Order.
57.
This Order is intended to be, and shall be construed to be, a final order issued
pursuant Section 1053 of the CFPA, 12 U.S.C. § 5563, and expressly does not form, and may not be construed to form, a contract binding the Bureau or the United States.
58.
This Order will terminate 5 years from the Effective Date or 5 years from the
most recent date that the Bureau initiates an action alleging any violation of the Order by USA Discounters. If such action is dismissed or the relevant adjudicative body rules that USA Discounters did not violate any provision of the Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Order will terminate as though the action had never been filed. The Order will remain effective and enforceable until such time, except to the extent that any provisions of this Order shall have been amended, suspended, waived, or
terminated in writing by the Bureau or its designated agent.
59.
Calculation of time limitations shall run from the Effective Date and shall be based on calendar days, unless otherwise noted.
60.
The provisions of this Order shall be enforceable by the Bureau. Any violation of
this Order may result in the imposition by the Bureau of the maximum amount of civil money penalties allowed under Section 1055(c) of the CFPA, 12 U.S.C. § 5565(c).
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61. This Order and the accompanying Stipulation contain the complete agreement between the parties. No promises, representations or warranties other than those set forth in this Order and the accompanying Stipulation have been made by any of the parties. This Order and the accompanying Stipulation supersede all prior communications, discussions, or understandings, if any, of the parties, whether oral or in writing.
62. Nothing in this Order or the accompanying Stipulation shall be construed as allowing USA Discounters, its Board, officers, or employees to violate any law,
rule, or regulation.
IT IS SO ORDERED, this [ 3% day of August 2014.
*e shan maheminy
Richard Cordray, Directof”
Consumer Financial Protection Bureau
Stipulation ()
PDF of this document (4 pages)
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UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU ADMINISTRATIVE PROCEEDING File No. 2014-CFPB- In the Matter of:
USA Discounters, Ltd.
STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER The Consumer Financial Protection Bureau (Bureau) intends to initiate an administrative proceeding against USA Discounters, Ltd. (Respondent), under 12 U.S.C. §§ 5563 and 5565, for practices relating to the extension of credit in violation of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536. Respondent, in the interest of compliance and resolution ofthe matter, and v.rithout admitting or denying any wrongdoing, consents to the issuance of a Consent Order substantially in the form of the one to which this Stipulation and Consent to the Issuance of a Consent Order is attached (Consent Order), and which is incorporated by reference.
In consideration of the above premises, Respondent agrees to the follov.ring: Jurisdiction 1.
The Bureau has jurisdiction over this matter under Sections 1053 and 1055 of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5563, 5565. Consent 2.
Respondent agrees to the issuance of the Consent Order, without admitting or denying any of the findings of fact or conclusions of lav.', except that Respondent 2014-CFPB-0011 Document 2 Filed 08/14/2014 Page 1 of 4
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admits the facts necessary to establish the Bureau's jurisdiction over Respondent and the subject matter of this action.
3.
Respondent agrees that the Consent Order will be deemed an "order issued v.rith the consent of the person concerned" under 12 U.S.C. § 5563(b)(4), and agrees that the Order v.rill become a final order, effective upon issuance, and v.rill be fully enforceable by the Bureau under 12 U.S.C. §§ 5563(d)(1) and 5565. 4· Respondent voluntarily enters into this Stipulation and Consent to the Issuance of a Consent Order.
s.
The Consent Order resolves only Respondent's potential liability for law violations that the Bureau asserted or might have asserted based on the practices described in Section V of the Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. Respondent acknowledges that no promise or representation has been made by the Bureau or employee, agent, or representative of the Bureau, about any liability outside of this action that may have arisen or may arise from the facts underlying this action or immunity from any such liability. 6.
Respondent agrees that the facts described in Section V of the Consent Order v.rill be taken as true and be given collateral estoppel effect, v.rithout further proof, in any proceeding before the Bureau based on the entry of the Consent Order, or in any subsequent civil litigation by the Bureau to enforce the Consent Order or its rights to any payment or monetary judgment under the Consent Order, such as a non-dischargeability complaint in any bankruptcy case. 2014-CFPB-0011 Document 2 Filed 08/14/2014 Page 2 of 4
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7.
The terms and provisions of this Stipulation and the Consent Order will be binding upon, and inure to the benefit of, the parties hereto and their successors in interest.
8.
Respondent agrees that the Bureau may present the Consent Order to the Bureau Director for signature and entry vvithout further notice. Waivers g.
Respondent, by consenting to this Stipulation, waives: a.
Any right to service of the Consent Order, and agrees that issuance ofthe Consent Order will constitute notice to the Respondent of its terms and conditions;
b.
Any objection to the jurisdiction of the Bureau, including, without limitation, under Section 1053 of the CFPA;
c.
The rights to all hearings under the statutory provisions under which the proceeding is to be or has been instituted; the filing of proposed findings of fact and conclusions of law; proceedings before, and a recommended decision by, a hearing officer; all post-hearing procedures; and any other procedural right available under 12 U.S.C. § 5563 or 12 CFR Part 1081; d.
The right to seek any administrative or judicial review of the Consent Order;
e.
Any claim for fees, costs or expenses against the Bureau, or any of its agents or employees, and any other governmental entity, related in any way to this enforcement matter or the Consent Order, whether arising under common law or under the terms of any statute, including, but not 2014-CFPB-0011 Document 2 Filed 08/14/2014 Page 3 of 4
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limited to the Equal Access to Justice Act and the Small Business Regulatory Enforcement Fairness Act of 1996; for these purposes, Respondent agrees that Respondent is not the prevailing party in this action because the parties have reached a good faith settlement; f.
Any other right to challenge or contest the validity of the Consent Order; g.
Such provisions ofthe Bureau's rules or other requirements oflaw as may be construed to prevent any Bureau employee from participating in the preparation of, or advising the Director as to, any order, opinion, finding of fact, or conclusion of law to be entered in connection with this Stipulation or the Consent Order; and h.
Any right to claim bias or prejudgment by the Director based on the consideration of or discussions concerning settlement of all or any part of the proceeding.
USA Discounters, Ltd. BY:
8/11/2014 Date Vice President USA Discounters, Ltd.
2014-CFPB-0011 Document 2 Filed 08/14/2014 Page 4 of 4