DFC Global Corp. (NASDAQ: DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, today announced that its subsidiary Dealers’ Financial Services, LLC (DFS) has reached a settlement with the Consumer Financial Protection Bureau (“CFPB”) regarding certain aspects of its business.
As previously disclosed, the CFPB conducted a review of the Military Installment Loans and Educational Services (“MILES”) program, an automobile finance program whereby the Company’s subsidiary, Dealers’ Financial Services, LLC, is a service provider for third party lenders. The CFPB cited violations by DFS of the Consumer Financial Protection Act for deceptively marketing the prices and scope of certain add-on products. Without admitting or denying any of the facts or conclusions of the review, DFS agreed to a consent order with the CFPB to amend its practices in line with recommendations made by the CFPB, and to provide financial redress in the form of a $3.3 million restitution fund to be distributed to past and current DFS customers. The Company established a reserve for the restitution fund in a previous quarter.
“We cooperated completely in the CFPB examination of our DFS business,” said Jeff Weiss, DFC Global Corp. Chairman and Chief Executive Officer. “DFS is already in the process of modifying its compliance management system and communication procedures with customers to take into account these issues. In addition, we have refocused our attention on negotiations with new potential lending partners that the Company believes will provide more competitive financing alternatives to our service member customers. We are satisfied to have completed this review process enabling us to once again focus on serving DFS’s service member customers and growing the DFS business in this significant market.”
The Company also previously disclosed that the CFPB had completed a review of its U.S. retail operations in early fiscal 2013. The Company confirmed that, as a result of that review, it is taking steps to improve its operating and compliance procedures, controls and systems.