The Consumer Financial Protection Bureau (CFPB) is proceeding with its lawsuit against FirstCash Inc. for allegedly violating the Military Lending Act (MLA) by charging military families pawn loan interest rates exceeding the 36% annual percentage rate (APR) cap. This case is among a small group of Biden-era enforcement actions retained under the CFPB’s current leadership. 7, 8, 10
Case Background
- Allegations: The CFPB alleges FirstCash and its subsidiary Cash America West issued over 3,600 pawn loans to active-duty servicemembers and their dependents with APRs "frequently exceeding 200%" between 2017 and 2021.1, 2 The loans reportedly violated MLA requirements by:
- Repeat Offender: FirstCash inherited a 2013 CFPB order against its predecessor, Cash America International, which prohibited MLA violations. The current case accuses FirstCash of breaching that order. 1, 2
Legal Context
- Military Lending Act Protections: The MLA caps interest rates at 36% MAPR (Military Annual Percentage Rate) for covered loans, including pawn loans, and bans forced arbitration clauses. 3, 4
- CFPB’s Authority: The CFPB gained MLA enforcement power in 2013, allowing it to seek injunctions, restitution, and penalties for violations. 1
Recent Developments
- Survival Amid Dismissals: While the CFPB under acting Director Russell Vought has dismissed multiple Biden-era enforcement actions (e.g., cases against Capital One and Rocket Homes), 7, 9 the FirstCash case was explicitly authorized to proceed. 8, 10
- Strategic Significance: This case tests the CFPB’s ability to enforce the MLA amid broader operational disruptions, including halted investigations and suspended rulemaking under new leadership. 8, 10
Implications
- Military Families: A successful prosecution could recover damages for affected borrowers and reinforce MLA compliance. 1, 4
- CFPB’s Future: The case highlights tensions between the agency’s consumer protection mandate and political shifts in enforcement priorities. 6, 8
FirstCash denies wrongdoing, calling the allegations "without merit". 2 The outcome may hinge on whether courts uphold the CFPB’s interpretation of MLA applicability to pawn loans and its authority to pursue legacy cases during leadership transitions. 8, 10
Citations:
- https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-pawn-lenders-for-cheating-military-families/
- https://www.cbsnews.com/news/cfpb-lawsuit-firstcash-pawn-loan-interest/
- https://consumer.georgia.gov/consumer-topics/military-lending-act
- https://www.militarymoney.com/debt/military-lending-act/
- https://www.wilmerhale.com/en/insights/client-alerts/20250122-cfpb-report-signals-shift-to-state-level-enforcement
- https://www.americanactionforum.org/insight/the-cfpb-under-the-biden-administration/
- https://apnews.com/article/cfpb-drops-capital-one-rocket-lawsuits-e3a4a18ccd9ddd97610ef23fd6b843b2
- https://www.hklaw.com/en/insights/publications/2025/02/cfpb-grinds-to-a-halt-impacts-on-industry
- https://www.jdsupra.com/legalnews/cfpb-dismisses-five-enforcement-actions-4037935/
- https://finance.yahoo.com/news/us-cfpb-asks-pause-comerica-204938910.htm
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