The CFPB is making it clear that it is going to hold payment processors responsible for it’s customers actions. The CFPB charged one of the nation’s largest payment processors, Washington-based Meracord LLC, for processing $11.5 million in illegal upfront fees from consumers on behalf of debt-relief service providers.
The collection’s companies were Payday Loan Debt Solution and American Debt Settlement Solutions. The CFPB had already obtained judgments against the two firms.
Alan Kalinsky of Ballard Spahr summed it up:
“Rather than prosecute hundreds of cases against lenders that regulators think are violating the law, they realize a lot of debt settlement companies and lenders outsource to third party providers. By going after third parties if you can get them to stop servicing what appears to be an illegal activity, that’s a very efficient way in their mind of the regulators of stopping the activity overall.”
You can read the full article titled CFPB Flexes Enforcement Muscles Against Payment Processors in the American Banker.
