(Reuters) – The U.S. consumer financial watchdog agency on Monday said it had permanently barred California mortgage broker RMK Financial Corp. from the mortgage lending industry, accusing it of repeat violations against military personnel and their families.
The announcement came the same day the U.S. Supreme Court agreed to hear a case that the Biden administration has said threatens the very survival of the Consumer Financial Protection Bureau (CFPB), which was created nearly 12 years ago after the global financial crisis but has faced repeated attacks in the courts.
Despite a 2015 order, the private non-bank lender, which does business as Majestic Home Loan, continued to lie to military families by claiming its home loans were endorsed by government agencies, CFPB Director Rohit Chopra said in a statement.
“Our action reflects our commitment to weed out repeat offenders, and we are shutting down this outfit for good,” he said.
Majestic Home Loan did not immediately respond to a request for comment on the action, which also involved a $1 million penalty. The CFPB order said the company had neither admitted or denied the allegation.
According to the CFPB, Majestic Home Loan “tricked” military families by falsely claiming government affiliation while also deceiving borrowers about interest rates.
It marked the second time in a week that the CFPB had taken action against a non-bank lender accused of repeat offenses against military personnel and their families.
The agency on Thursday announced a $10 million fine against the Georgia title lender TitleMax for allegedly making unlawful loans to military personnel and charging illegally high interest rates. The company denied those allegations.
The Supreme Court on Monday agreed to hear an appeal against an October ruling from the 5th U.S. Circuit Court of Appeals which held that the CFPB’s funding, which is provided not by congressional appropriation but by the Federal Reserve, was unconstitutional.
(Reporting by Douglas Gillison; Editing by Sharon Singleton)
