South Carolina Loan Firm Fined by CFPB
Inside Subprime: Feb 11, 2019
By Lindsay Frankel
A man accused of brokering high-interest loan for veterans is now permanently banned from any such transactions in the future by the federal consumer watchdog agency, but the settlement has left some critics unconvinced.
Mark Corbett settled in January 2019 with the Consumer Financial Protection Bureau over a slew of deceptive actions relating to buying retirement and disability pensions from former servicemembers.
The bureau found that Corbett, working as a broker for Doe Companies, was misleading veterans into contracts that were invalid because veterans’ pension payments are unassignable under federal law, or cannot be transferred to other individuals besides the veteran or a living spouse.
The CFPB also claimed that he misrepresented to consumers what his product was — he was telling veterans it was a purchase of payments and not a high-interest credit offer. He also lied to them about when they would receive their funds, and didn’t let them know the applicable interest rate on the credit offer.
In the scheme, Corbett is accused of taking advantage of veterans with military disability pensions between 2011 and 2019. Corbett would tell vets that investors were willing to buy their pensions, marketing pension buying through several websites. Veterans were made to believe they would receive a lump-sum payment, ranging from a couple thousand dollars to tens of thousands of dollars.
Veterans would then use an online portal to redirect their Department of Veterans Affairs or Defense Finance and Accounting Service pension payments. If the contract was only for a part of a pension, the companies would return a portion of the monthly pension back to the veterans.
The high interest the veterans were being charged on the credit offer turned out to be as much as 40 percent in some cases.
Through the settlement, Corbett also has to pay $1 in penalties; that number is so low, the CFPB says, because Corbett proved he didn’t have the funds to pay more and because of his cooperation with the government.
Critics have expounded on the low figure and its former and current directors, saying that they are allowing a “noxious specimen” go unchecked on consumers, and that officials are giving Corbett and other deceptive actors a slap on the wrist. The Center for Responsible Lending noted that the settlement comes soon after the CFPB indicated it wouldn’t be monitoring lenders for following the Military Lending Act.
But it’s not the only place Corbett is being sued. In a legal case in South Carolina, Corbett is accused of profiting off of financially desperate former servicemembers, claiming that the number of veteran victims could be in the thousands. Corbett is accused of being just one of many involved in a web of pension-purchasing scams.