The Connecticut Department of Banking has entered into a consent order with TrueAccord for a number of alleged violations, including collecting on loans that violated state usury laws, commingling funds from its business account with funds in its trust accounts, and advertising financial products and services of unlicensed affiliates in communications with consumers.
TrueAccord has agreed to pay a fine of $10,000, refund some of the funds it collected, cease and desist from soliciting financial services products in its communications with consumers, and implement appropriate policies and procedures.
The order stems from the result of a recent examination, which found TrueAccord collected on loans illegally originated to Connecticut borrowers by a tribal lender from January 2015 until at least November 2020.
“[T]he Commissioner alleges that from January 2015 to June 2016, TrueAccord collected on loans made by lenders affiliated with federally recognized Native American tribes, unlicensed in Connecticut, that charged interest at a rate of greater than 12% per annum on loans in amounts of fifteen thousand dollars or less, in violation of Section 36a-573(a) of the Connecticut General Statutes, in effect at that time, and from July 2016 to at least November 2020, TrueAccord collected and received payments on small loans in amounts less than five thousand dollars made by lenders affiliated with federally recognized Native-American tribes, unlicensed in Connecticut, that had annual percentage rates of greater than 36%, in violation of subsections (b) and (c) of Section 36a-558 of the Connecticut General Statutes;”
A TrueAccord spokesperson confirmed the company has worked with tribal lenders, arguing it was be better for TrueAccord to serve these customers than another debt collection firm:
“When TrueAccord first started working with bonafide tribal lenders, offering loans under sovereign tribal law, our thinking was that those consumers were going to be subject to collections whether we were involved or not. In keeping with our mission to improve the experience of consumers in delinquency, our thinking was that it was ultimately better for the consumers to have a flexible, digital first experience that treated them with respect rather than be subject to other collection practices that might be less consumer friendly.”