- The CFPB brought a lawsuit against installment lender Heights Finance Holding Company f/k/a Southern Management Corporation and several of its subsidiaries (collectively, “Southern Management”) over alleged violations of the Consumer Financial Protection Act.
- According to the complaint, Southern Management’s business model involved pushing financially vulnerable borrowers to refinance their loans repeatedly (“loan-churning”), and collecting additional fees for each successive refinance (“fee-harvesting”). In doing so, the company incentivized employees to prioritize pushing borrowers to refinance over collecting past-due balances on loans, among other things.
- The CFPB seeks a permanent injunction preventing Southern Management from committing future violations of the CFPA, as well as rescission of contracts, restitution, and civil penalties.