OCC Takes Action Against ACE Cash Express, Inc. and Goleta National Bank
OCC Takes Action Against ACE Cash Express, Inc. and Goleta National Bank
WASHINGTON — The Office of the Comptroller of the Currency announced today that ACE Cash Express, Inc., and Goleta National Bank, Goleta, California, signed cease and desist orders requiring them to end unsafe and unsound payday lending activities and to pay $325,000 in civil money penalties. ACE is a third-party service provider for Goleta in the origination, servicing, and collection of the payday loans booked by the bank. ACE offers payday loans on behalf of Goleta in 18 states and the District of Columbia.
ACE agreed to terminate payday lending activities undertaken through Goleta by , and to pay $250,000 in penalties. The order also prohibits ACE from entering into any kind of written or oral agreement to provide any services, including payday lending, to any national bank or its subsidiaries without the prior approval of the OCC. In addition, the cease and desist order requires ACE to indemnify Goleta for 100 percent of the costs, expenses, legal fees, and damages from third party claims.
The actions against ACE were prompted by several factors, including ACE’s failure to safeguard 641 customer loan files. The files, which represented payday loans carried on Goleta’s books, were discarded in a trash dumpster in Portsmouth, Virginia in . The loans in Delaware OCC was prepared to allege that the improper disposal of loan files resulted in violations of laws and regulations. (more…)