GreenSky LLC (NASDAQ: GSKY) has signed a new deal with the Consumer Financial Protection Bureau to end a recent inquiry. There has been an ongoing inquiry arising from consumer complaints, and the company needed to leave that behind. Signing the agreement with CFPB closes the chapter of the inquiry related to the allegedly unauthorized loans.
The nature of the deal
GreenSky seems rather tactical in its payment of the civil money penalty of $2.5 million. It hasn’t admitted any wrongdoing or liability, but the payment it makes sets it free from the inquiry. Moreover, reports show that there has been insufficient evidence of customer authorization and will be handle matters accordingly.
Dealing with the situation will involve a cash redress where the customer authorization gets capped at $3 million with an associated remittance of up to $750,000. The capping in credit redress via loan cancellations will be at about $6 million.
The company’s president Tim Kaliban opines, “We are exceedingly proud of our record of consumer advocacy and have already implemented many of the protocols and business practices called for by the agreement, which protocols and practices have been very well received by our merchants and will only serve to enhance our best-in-class merchant and consumer experience.”
Kaliban considers the resolution of the matter, which has been haunting the company for quite a long time to be a step in the right direction. He believes that it will give them room to focus more on their business activities.
He discloses that they need to get back to their feet again, which will involve strengthening and growing their business. He reveals that they have established their business on a solid foundation of integrity and trust. He applauds the management for its full cooperation with the CFPB in connection with its inquiry and value and respect regarding consumer protection.