The CFPB took another swipe at SNAAC - - Security National Automotive Acceptance Company -- with a consent order that the Ohio-based auto lender specializing in loans to servicemembers pay an additional $1.25 million in penalties for noncompliance with an October 28, 2015, CFPB Administrative Order. According to the Bureau's press release the CFPB determined that SNAAC failed to provide more than $1 million in refunds and credits due under the earlier order to more than 1,000 consumers. In 2015, SNAAC paid a $1 million civil penalty and was supposed to make approximately $2.28 million in redress payments. Yesterday's CFPB press release reports that SNAAC treated accounts that were settled-in-full as having a positive account balance instead of providing refunds. These "account credits" were worthless to consumers who no longer owed SNAAC money and couldn't use the credits toward another loan with SNAAC, said the Bureau. SNAAC gave consumers whose accounts were discharged in bankruptcy the same worthless-credit treatment.
To ensure that the yet-to-be-completed redress payments will be properly delivered, the Bureau has now ordered SNAAC to pay the funds to the Bureau for redistribution to the consumers involved, along with a fee of $75,000 to the Bureau to cover the Bureau's costs involved. In addition, SNAAC must pay an additional civil money penalty of $1.25 million to the Bureau's Civil Penalty Fund. For additional information, see "CFPB hits SNAAC with another $1.25M CMP," in our Penalty Pages.
A SNAAC statement released yesterday reports that the settlement with the Bureau "resolves a disagreement between SNAAC and the CFPB over the interpretation of part of a Consent Order issued by the Bureau in October 2015," and that SNAAC agreed to the settlement "to close the matter and move forward in serving customers in the respectful, honorable manner that has been the company's tradition."