Predatory loans from TAB Bank and EasyPay Finance hurt veterans and military Consumer Federation of America

Washington, DC — The predatory lending practices of EasyPay Finance and the Utah-based, FDIC-supervised Transportation Alliance Bank (TAB Bank) are hurting service members, veterans and their families, according to a new report from a coalition of consumer advocacy groups released ahead of Memorial Day.

EasyPay Finance, which charges up to 189% APR, appears as a finance option at furniture stores, auto repair shops, pet stores and other retail outlets everywhere – including in stores near military bases where loans are more likely to affect the military. For example, EasyPay Finance is available at many auto repair shops and furniture stores that offer EasyPay loans near you. a military base.

“The fact that predatory lenders continue to target military families is unacceptable,” said Besa Pinchotti, CEO of the National Military Families Association. “Military families make enormous sacrifices for our country every day. It’s outrageous that after all the work we’ve done to protect our military families, they continue to fall prey to lenders, especially when they’re most vulnerable, needing money to fix their cars. , to furnish their home after a military… mandated move or to make ends meet during a deployment.

Because banks are exempt from state interest rate caps, TAB Bank helps disguise EasyPay Finance loans as “bank loans,” allowing it to charge exorbitant rates in states that prohibit them. A military consumer in Virginia complained of “illegal” interest of 119% which appeared to be well above the legal rate in Virginia.

“The men and women who have served our country deserve better than predatory loans,” said Paul E. Kantwill, executive director of the Rule of Law Institute at Loyola University Chicago School of Law. “At 100% to 189% APR, TAB Bank and EasyPay Finance loans evade state interest rate laws and harm members of the military community.”

The complaints indicate that EasyPay Finance and TAB Bank may violate or evade the Military Loans Act, a law that limits the annual interest rate on loans to military members and their dependents to a maximum of 36%. For example, a service member in Virginia got stuck with 96% APR for an auto repair and couldn’t get EasyPay to fix the rate. Another Nevada serviceman told the pet store it was a serviceman, but “I’m now paying 189% interest on my loan. When I called [EasyPay] they were rude and said they didn’t have to lower my interest rate at all and they based everything on a loophole.

“EasyPay and TAB Bank are using the harmful bank leasing model to evade federal and state laws and lure military and veterans into predatory, exorbitantly priced loans for auto repairs, pet adoptions and home care. ‘other retail purchases’, said Rachel Gittleman, financial services outreach manager for the Consumer Federation of America.

“It is inadmissible that TAB Bank and EasyPay Finance provide loans with up to 189% interest to military and veterans”, said Lauren Saunders, associate director of the National Consumer Law Center. “Auto repair shops, pet stores and other reputation-conscious retailers should stop funneling customers into predatory loans from TAB Bank and EasyPay Finance.”

Many military consumers have complained about EasyPay loans to the Consumer Financial Protection Bureau, reporting:

  • Exorbitant interest rates of 96% to 189% charged to military, veterans or their family members, sometimes in states that do not allow these rates.
  • Payments for months and years that do little to reduce the loan balance.
  • Interest rate hidden in fine print. Applications that have to be completed on small cell phones, making contract language barely legible, leave consumers in the dark about the terms.
  • Elusive promises of full interest repayments if paid in 90 days, with barriers that prevent consumers from avoiding interest.
  • Automatic payments are not processed correctlyresulting in late payments which deprive the consumer of the interest subsidy.
  • Rude and unhelpful customer service and administrative errorsresulting in missed payments, fees, and loss of the interest-free option.
  • Damage to credit reports, including loans paid in full or misreported. No response to consumer disputes.
  • Debt collection issueswith loans sent to debt collectors after interest rates rose, insults even when payment errors occurred while the consumer was in hospital, and debt collectors failing to correct reports of solvency after repayment of the loan.

“The Ministry of Defense studied high interest loans like those issued by EasyPay Finance and TAB Bank and concluded that they harmed troops and their families – and undermined military readiness,” said Nadine Chabrier. , Senior Policy Advisor at the Center for Responsible Lending. “TAB Bank and retailers, such as Meineke, should stop facilitating the sale of EasyPay loans, which inflict hardship on military communities and consumers across the country. The FDIC is responsible for overseeing TAB Bank and should prevent it from abusing its charter by authorizing these predatory loans.

A recent consumer alert warns against deceptive auto repair financing practices and tells consumers what to do if they have taken out an EasyPay/TAB bank loan. Military families should read the fine print to avoid expensive loans at high interest rates and know their rights under military loan law. Those who have experienced these unreasonably high interest rates and deceptive financial lending practices should contact the Consumer Financial Protection Bureau for investigation.

The coalition is also circulating a petition to urge the FDIC to stop TAB Bank and other banks from helping nonbank lenders disguise their loans as bank loans exempt from state interest rate limits. The petition currently has over 19,000 signatures.


Contact: Rachel Gittleman

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