The CFPB began the investigations in response to a notification about the issue from the Veterans Administration (VA).

Most of the advertisements were direct mail to service-members and veterans. The CFPB’s allegations included advertisement of credit terms that were not actually available, failure to disclose the repayment terms over the entire term of the loan advertised as required by Reg Z, and misrepresentations that the advertisement was affiliated with the borrower’s current lender or the VA. For example, one advertisement prominently stated ‘FICO scores as low as 500’ along with an interest rate and APR, while only the fine print noted that the advertised rate and APR were only available to those with a credit score of 740 or higher. The advertised rate was generally only available with a lower credit score, along with the payment of additional discount points that were not noted in the disclosure of rate and APR. Two lender advertisements included the statement that ‘the Economic Stimulus Program will end soon,’ implying a false urgency to respond to the advertisement.

These consent orders underline the importance for lenders to review their advertisements carefully for compliance with regulatory requirements as well as for potential misrepresentations, not just those directed at service-members and veterans, but for advertisements to all consumers.