Jumbo loan company faces fraud probe
NEW YORK — The federal Consumer Financial Protection Bureau says a payday loan company has violated federal law in a massive fraud investigation that has resulted in more than $1 billion in losses.
The CFPB says that the company that owned and operated the loan company, Jumbo Loan, violated federal consumer credit rules when it gave people an unlimited loan without paying their loan principal, interest and fees.
The bureau says Jumbo failed to adequately verify borrowers and failed to notify them of the loan default.
It also alleges that Jumbo had a history of issuing deceptive and predatory loans that caused millions of consumers to lose their homes.
The U.S. Attorney’s Office in the Eastern District of New York is investigating the company’s operations and alleged violations of the Truth in Lending Act.
Jumbo was fined $50 million by the CFPO last year and was ordered to pay $10 million in penalties and restitution.JUMBO LENDING ASSOCIATES was incorporated in January 2013 and it had offices in five states, according to the company.
It is one of several payday loan companies with offices in the United States.