Understanding CFPB v. Think Finance and Consumer Refunds

The enforcement action CFPB v. Think Finance, LLC is a major case in which a federal consumer protection agency alleged that an online lending business helped arrange illegal loans, violated state licensing and interest-rate laws, and improperly collected money from borrowers who did not legally owe the debts. As a result, hundreds of thousands of consumers are now eligible for compensation funded through a federal victims relief fund.

Background: Who Is the CFPB and What Was This Case About?

The Consumer Financial Protection Bureau (CFPB) is a U.S. government agency tasked with enforcing federal consumer financial laws and protecting people in the marketplace for loans, credit, and financial services. In 2017, the CFPB filed a lawsuit in federal court against Think Finance, LLC and six related companies, claiming that they engaged in unfair, deceptive, and abusive acts and practices in violation of the Consumer Financial Protection Act.

According to the Bureau, Think Finance and its subsidiaries worked behind the scenes to manage and support three internet-based lenders that offered high-cost installment loans and lines of credit to consumers across the country. These lenders were:

• Mobiloans
• Great Plains Lending
• Plain Green Lending

The CFPB alleged that these businesses, with the help of Think Finance, ignored state laws that limit interest rates or require lenders to be licensed, and then tried to collect on loans that were legally invalid in many states.

Why the Loans Were Considered Illegal in 17 States

Many U.S. states have laws that control how much interest lenders can charge and whether a company needs a license to offer or collect loans within that state. When creditors exceed those caps or ignore licensing requirements, the loans may be considered void, unenforceable, or otherwise invalid under state law. The CFPB’s lawsuit alleged that Think Finance was involved in collecting loans that were completely or partly void under the laws of 17 states.

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The states identified in the Bureau’s allegations are:

• Arizona
• Arkansas
• Colorado
• Connecticut
• Illinois
• Indiana
• Kentucky
• Massachusetts
• Minnesota
• Montana
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• Ohio
• South Dakota

In these states, the CFPB alleged that consumers were told they owed money on loans that exceeded state interest-rate caps or were made or collected by lenders that lacked proper licenses. Despite this, Think Finance and its partners allegedly continued to demand payment and withdrew funds directly from borrowers’ bank accounts.

How Think Finance Worked with Online Tribal Lenders

The CFPB’s amended complaint described Think Finance and its subsidiaries as operating a common enterprise that partnered with tribal-affiliated lending businesses to offer loans nationwide over the internet. This model—often referred to as a tribal lending partnership—has been the subject of multiple court cases in which borrowers alleged that lenders tried to avoid state usury and licensing rules by claiming tribal sovereign immunity.

In a related appellate decision not brought by the CFPB, consumers challenged similar high-rate online loans connected to tribal lenders and argued that the loan contracts and arbitration clauses could not be used to block their state and federal legal claims. The federal appeals court allowed borrowers to move forward with their case, and the U.S. Supreme Court declined to review that ruling. Although that litigation was separate from the CFPB’s enforcement action, it illustrates the wider legal controversy surrounding online loans structured through tribal entities.

Key Allegations: Deception, Unfair Practices, and Abusive Conduct

In its lawsuit, the CFPB alleged that Think Finance and its subsidiaries engaged in multiple types of unlawful conduct under federal consumer protection law.

• Deceptive practices: Demanding payment on loans that people did not legally owe because the loans were void or partly void under state law.
• Unfair practices: Making electronic withdrawals from borrowers’ bank accounts when those borrowers had no legal obligation to repay the debts.
• Abusive practices: Taking advantage of consumers’ lack of understanding about the legality of the debts and their rights under state law.
• Substantial assistance: Providing help and support to outside debt collection companies that were also trying to collect on these illegal loans.

According to the CFPB, these actions caused people to lose money through payments, fees, and bank withdrawals on debts that should not have been collected.

The Consent Order: What the Court Required Think Finance to Do

In February 2020, the federal court entered a stipulated final consent order resolving the CFPB’s lawsuit against Think Finance and its subsidiaries. A consent order is a court-approved agreement that typically stops the alleged unlawful conduct and imposes conditions or penalties but does not always include an admission of wrongdoing.

The order in this case included several important terms:

• Ban on illegal lending conduct: The Think Finance entities were prohibited from offering, arranging, or collecting loans in the 17 states if the loans violate state licensing or interest-rate laws.
• Restrictions on assisting others: They were also barred from helping other entities engage in similar illegal lending or collection practices.
• Civil money penalty: The order imposed a civil penalty of $1 for each of the seven entities, which is a symbolic amount; the main consumer relief instead comes from the CFPB’s separate victims relief fund.

While the civil penalties in the order were minimal, the case set the stage for substantial monetary relief through a different mechanism that does not depend on the company’s ability to pay.

Victim Relief: More Than $384 Million in Payments to Consumers

In 2024, the CFPB announced that it would distribute more than $384 million to about 191,672 consumers who allegedly repaid loans they did not legally owe. The money is being paid out of the CFPB’s Victims Relief Fund (also called the Civil Penalty Fund), a pool of money collected from enforcement actions that can be used to compensate harmed consumers.

The distributions are being handled by a third-party administrator under contract with the CFPB, not by Think Finance itself.

According to the Bureau, consumers do not need to pay any fee or hire a service to receive their money, and payments are being sent automatically to eligible individuals identified from company and case records.

How the Payment Administration Process Works

The CFPB has hired Epiq Systems to administer payments, manage records, and respond to consumer questions in the Think Finance matter. This arrangement is a common approach in large-scale consumer redress programs.

According to the CFPB’s public information, consumers with questions can:

• Call a toll-free number dedicated to the Think Finance case
• Send an email to the case-specific address
• Write to a postal address for written inquiries and documentation

These contact details are provided on the CFPB’s official website and on any notices sent to affected consumers. The administrator can explain how a payment amount was calculated, what to do if your name or address has changed, and how to handle issues such as lost or expired checks.

What This Case Shows About State Law and Online Lending

The Think Finance action underscores the importance of state law in shaping what online lenders can and cannot do. Even when loans are offered nationwide over the internet, state usury limits, licensing mandates, and consumer protection laws still apply.

Key lessons include:

• State interest-rate caps still matter: Even if a lender claims a different governing law in the contract, courts and regulators can deem the loans void when state caps are exceeded.
• Licensing is not optional: States can require lenders and collectors to be licensed before they can legally offer or collect loans from residents.
• Collection of void loans can be illegal: Demanding payment on debts that are void under state law can itself be an unfair or deceptive practice.
• Assisting illegal conduct creates liability: Companies that provide substantial support to unlawful lending or collection operations can also be held responsible under federal law.

These principles are echoed not only in CFPB enforcement but also in private lawsuits brought by borrowers in federal courts.

Protecting Yourself from Problematic Online Loans

While the Think Finance case involves conduct that has already occurred, consumers today can use several practical steps to reduce the risk of facing similar problems with high-cost online loans.

• Check your state’s rules before borrowing. Many state regulators publish maximum legal interest rates, licensing lists, and consumer advisories on their official websites.
• Verify that the lender is licensed in your state, especially for payday loans, installment loans, and lines of credit.
• Be wary of triple-digit APRs. Extremely high annual percentage rates often signal products that may be restricted or illegal under state law.
• Read the repayment terms, including whether payments will be taken automatically from your bank account.
• Save all records—emails, loan agreements, payment receipts, and bank statements. These documents are crucial if there is a dispute or an enforcement action later.

If you believe you have been harmed by a financial product or service, you can file a complaint directly with the CFPB, which accepts complaints online and by phone. State attorneys general and state financial regulators also maintain complaint processes and may investigate patterns of unlawful conduct.

Frequently Asked Questions (FAQs)

How do I know if I am part of the Think Finance refund distribution?

According to the CFPB, eligible consumers are those who obtained loans connected to Think Finance or its related entities and made payments that were not legally owed under the laws of one of the 17 affected states. If you are eligible, the payment administrator sends your refund automatically using information from company and case records. Official notices from the CFPB or its administrator will explain that the money is coming from the CFPB’s Victims Relief Fund.

Do I have to pay taxes or fees on the refund?

The CFPB does not charge any fee for you to receive money from its victims relief fund, and you do not need to hire a company or lawyer to get your payment. For tax treatment, consumers should consult the IRS or a qualified tax advisor, because the tax impact of settlement or restitution payments can vary by individual situation and tax law.

What if I think my refund amount is wrong or I never received a payment?

If you believe you should have received a payment or that your amount is inaccurate, you can contact the payment administrator using the phone number, email, or mailing address listed on the CFPB’s official web page for the Think Finance case. The administrator can review your record, explain the calculation, and advise on next steps if additional documentation is needed.

Can I still sue Think Finance or the related lenders on my own?

A consent order and CFPB-administered refunds do not automatically stop individuals from bringing their own private lawsuits, but your rights depend on state law, applicable statutes of limitations, and any previous settlements or releases you may have signed. If you are considering legal action, you should speak with a lawyer who is familiar with consumer finance and state usury laws.

Will similar cases result in refunds for other loan programs?

The CFPB uses its Victims Relief Fund to provide payments when it has collected civil penalties from one or more companies and identifies groups of harmed consumers who can be compensated. Each case is different, and there is no guarantee that every unlawful lending practice will result in refunds, but the Think Finance matter shows that the fund can deliver large-scale relief even when a company cannot fully repay affected consumers.

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medha deb

 

Medha Deb is an editor with a master's degree in Applied Linguistics from the University of Hyderabad. She believes that her qualification has helped her develop a deep understanding of language and its application in various contexts.

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