CFPB and Think Finance Near Settlement
On the one year anniversary of the Consumer Financial Protection Bureau’s (CFPB) lawsuit against Think Finance, both parties filed a joint motion last Friday to stay discovery for 60 days, a sign that both sides are nearing a settlement.
During the initial lawsuit, the CFPB claimed that Think Finance engaged in deceptive practices and collected loan payments from consumers who were not under legal obligation to pay. “We are suing Think Finance for deceiving consumers into repaying loans they did not legally owe,” said CFPB Director Richard Cordray. “Think Finance wrongly took money from people’s bank accounts, so we are seeking relief for consumers and a civil money penalty.”
In response, Think Finance argued that the CFPB was unconstitutionally structured and thus could not legally file a lawsuit. “The only appropriate remedy … is to hold the CFPB unconstitutional as currently structured, and dismiss this lawsuit until Congress puts a constitutional agency and director in place,” said Think Finance.
However last Friday, the two parties came together to issue a joint motion to stay discovery for two months in order to finalize a settlement. “In the coming weeks, the parties anticipate finalizing negotiations concerning, among other things, injunctive relief terms, a restructuring support agreement, a term sheet for the restructuring support agreement, and a Chapter 11 plan in the bankruptcy case,” according to the joint motion.