A.G. Schneiderman Leads National Coalition Of States And Federal CFPB In Striking Down Abusive Military Consumer Lender
Settlement Provides Nearly $92 Million In Debt Relief To Over 17,800 Affected United States Servicemembers Worldwide
Schneiderman: Those Who Prey Upon Our Nation’s Heroes Will Be Held Accountable
WATERTOWN – Attorney General Eric T. Schneiderman, leading a partnership of the federal Consumer Financial Protection Bureau and 12 other states, today announced a global settlement with a military consumer lender commonly known as Rome Finance Company, based in California and Georgia. The settlement liquidates Rome Finance and its successor corporations, provides nearly $92 million in debt relief to over 17,800 affected United States servicemembers worldwide, marks all outstanding debt “paid in full” with consumer finance reporting agencies, and bans new business by the company and its principals. Servicemembers will keep all merchandise purchased, but debts associated therewith have been erased and judgments will be vacated on request, including approximately 5,400 judgments located to date. Over 550 New York State servicemembers, with a combined total of over $2.2 million in Rome Consumer debt, will benefit directly from this settlement and ancillary resolutions.
“The brave men and women of our military, who are already sacrificing so much, shouldn’t also have to worry about being exploited by predatory and abusive lenders,” Attorney General Eric T. Schneiderman said. “By holding Rome Finance accountable for these egregious acts, we are sending the message that those who prey upon our nation’s heroes will be held accountable.”
Rome Finance, which did business most recently as Colfax Capital Corporation and Culver Capital, LLC, financed consumer debts exclusively to servicemembers, typically for computers, gaming systems, and other goods and services from retailers online or at malls near military bases. Payments were extracted from the military member’s paycheck and were secured by access to a bank account.
Attorney General Schneiderman and the other governmental representatives alleged multiple illegalities, including failing to accurately disclose finance charges and interest rates, knowingly or recklessly assisting in the practice of financing contracts with inflated prices of goods sold, failing to provide required periodic disclosures, violations of State and CFPA’s unfair, deceptive, or abusive acts and practices prohibitions by financing consumer loans and/or collecting on consumer loans, and violation of the Military Lending Act for excessive interest, onerous provisions, and for requiring allotment payment backed by access to a bank account.
Participating in this national effort with Attorney General Schneiderman were the federal Consumer Financial Protection Bureau, and the states Attorneys General of Colorado, Delaware, Florida, Georgia (participating through the Georgia Governor’s Office), Kentucky, Indiana, Iowa, Massachusetts, Michigan, North Carolina, Tennessee and Vermont.
Attorney General Schneiderman earlier permanently banned a related retailer, “SmartBuy” from peddling consumer goods and contracts to servicemembers in the state of New York in 2012. Earlier settlements in related litigation yielded $12.9 million in debt relief nationwide, bringing the combined amount of erased debt to well over $100 million as a result of the effort.
Along with representatives from the Attorney General’s Consumer Protection Bureau, the New York investigation was conducted by Investigator Chad Shelmidine.
The matter is being handled by Assistant Attorney General In Charge Deanna R. Nelson, in the Watertown Regional Office, together with Marty Mack, Executive Deputy Attorney General for Regional Offices.