In a message sent to SubPrime Auto Finance News on Tuesday, U.S. Equity Advantage (USEA) and chief executive officer Robert Steenbergh explained how they ended up entering into a consent order with the Consumer Financial Protection Bureau when the payment processing firm reached “a bridge too far” during its dialogue with the regulator.

To recap, the bureau distributed a news release on Friday, saying it issued a consent order against USEA and Steenbergh. The CFPB said it found that the company’s disclosures and advertisements of its auto-finance payment program contained misleading statements in violation of the Consumer Financial Protection Act of 2010’s prohibition against deceptive acts or practices.

USEA responded by stating Friday’s announcement ended “a four-year, far-reaching and exhaustive examination requiring hundreds of man hours and thousands of pages of documents.” The company insisted the settlement makes clear that USEA does not admit to any of the CFPB’s allegations.

In fact, Steenbergh went so far as to call most of the bureau’s allegations “factually inaccurate and patently false.”

At the end of this four-year investigation, Steenbergh said the CFPB could not produce a single customer complaint nor any examples of actual consumer harm. Instead, he said the CFPB took issue with language that occurred in two lines of a “long-ago” revised and frequently unused supplemental disclosure tool, as well as one phrase in a discontinued generic advertisement. 

“That was it. That’s all the CFPB could allege after four years,” Steenbergh said. “And, in making these ‘findings,’ the CFPB ignored evidence showing that 95% or more of our customers could not have possibly even seen or potentially relied on the disclosures at issue — which we changed two-and-a-half years ago.”

Nonetheless, the consent order imposes a judgment against USEA requiring it to pay $9.3 million in consumer redress and contains requirements to prevent future violations.

While the CFPB does not “approve” businesses in the process of reaching this settlement, USEA said the CFPB did not take issue with the company’s biweekly payment services, including aligning payments to paychecks, payment processing, enrollment process and/or amortization calculations.

USEA also said the bureau acknowledged the value of all its products and services, including credit monitoring, credit scoring, vehicle valuation and recall alerts.

Furthermore, USEA asserted that the CFPB found no other potential law violations, including anything related to Regulation E.

Steenbergh then acknowledged what resulted in USEA entering into the consent order despite these assertions.

“While we were willing to stand up to the CFPB, when its attorneys threatened to subpoena F&I managers, it became a bridge too far,” Steenbergh said. “Despite never stepping foot in a dealership and failing to identify a single customer complaint about our service, the CFPB claims it ‘knows what goes on’ in dealerships. That’s their idea of evidence. It was ridiculous, but I wasn’t about to let them continue their modern-day inquisition and drag anyone else into it. So, we settled.

“While we are not thrilled with having to pay $900,000 to resolve this situation, it’s a small fraction of what the CFPB originally demanded,” he continued.

The CFPB said the ordered redress amount is suspended upon payment of $900,000 and a $1 civil money penalty to the bureau.

While perhaps weary from the clash with the CFPB, Steenbergh described how USEA plans to proceed.

“The good news is that this settlement will not impact our business at all. It will do nothing to impact the best-in-class service and value our 60+ team members have been providing to our business partners and customers for over 17 years,” Steenbergh continued.

“We are happy to put this injustice behind us, and we look forward to continuing our rapid growth and nationwide expansion. And, most importantly, I would personally like to thank all of our loyal dealer, banking and agent partners who told us when we informed them about this forthcoming settlement, that it didn’t change their perception of USEA in the slightest,” he went on to say.