CFPB Reaches Settlement with FirstCash, Inc. and Its Subsidiaries for Military Lending Act Violations — WA (2025)
The Consumer Financial Protection Bureau reached a $5,000,000 settlement with FirstCash, Inc. and its subsidiaries for Military Lending Act violations. This represents the first recorded settlement of this type in Washington state, as typical cases in this category show $0 in settlements.
Opening Summary
The Consumer Financial Protection Bureau reached a $5 million settlement with FirstCash, Inc. and its subsidiaries in August 2025 for violations of the Military Lending Act that harmed active-duty servicemembers and their families.
Case Background
FirstCash, Inc. operates one of the largest networks of pawn shops in the United States, with over 2,800 retail locations across multiple states. The company provides various financial services including pawn loans, retail sales of merchandise, and other consumer lending products. The CFPB's investigation focused on the company's lending practices specifically as they related to active-duty military personnel and their dependents.
The case emerged from the CFPB's ongoing supervision and enforcement efforts targeting companies that provide financial services to military families. The Military Lending Act was enacted to provide special protections for servicemembers, recognizing their unique financial circumstances and the potential for predatory lending practices to exploit military personnel. The investigation revealed that FirstCash's practices violated several key provisions of this federal law designed to protect military families from harmful lending practices.
FirstCash operates in numerous states and serves a diverse customer base, but the company's failure to properly implement Military Lending Act protections exposed active-duty servicemembers to prohibited lending terms and practices. The violations occurred across multiple locations and affected numerous military families who sought financial services from FirstCash locations.
Key Allegations / Claims
The CFPB found that FirstCash violated the Military Lending Act in several significant ways. The primary allegations centered on the company's failure to properly identify covered borrowers under the Act and its failure to provide required protections to active-duty servicemembers and their dependents. The company allegedly failed to implement adequate systems and procedures to determine whether loan applicants were covered by the Military Lending Act's protections.
Additionally, FirstCash allegedly charged military borrowers annual percentage rates that exceeded the 36% cap established by the Military Lending Act. This rate cap is a fundamental protection designed to prevent predatory lending to military families. The company also allegedly failed to provide required disclosures to military borrowers, including clear information about the Military Lending Act protections and the terms of their loans.
The CFPB also found that FirstCash failed to implement compliant loan agreements and did not establish proper policies and procedures to ensure ongoing compliance with the Military Lending Act. These systemic failures meant that military families were denied the protections Congress specifically created for them, potentially causing financial harm to servicemembers and their families during their time of service to the country.
Resolution & Amount
The settlement requires FirstCash to pay $5 million to resolve the CFPB's claims regarding Military Lending Act violations. This monetary penalty reflects the seriousness of the violations and serves as a deterrent to prevent similar conduct in the future. The settlement amount takes into account the scope of the violations, the number of affected military families, and the company's ability to pay.
Beyond the monetary penalty, the settlement includes significant compliance requirements. FirstCash must implement comprehensive policies and procedures to ensure future compliance with the Military Lending Act. The company must also establish systems to properly identify covered borrowers and provide all required protections and disclosures. The settlement includes ongoing monitoring and reporting requirements to ensure the company maintains compliance with federal military lending protections.
Applicable Law / Enforcement
The Military Lending Act, enacted in 2006 and strengthened in 2015, provides crucial protections for active-duty servicemembers and their dependents. The law caps annual percentage rates at 36% for covered loans and requires specific disclosures and protections. It prohibits certain loan terms and practices that could be harmful to military families, including mandatory arbitration clauses and unreasonable notice requirements.
The CFPB has authority to enforce the Military Lending Act under the Consumer Financial Protection Act. The Bureau actively supervises and examines companies that provide financial services to ensure compliance with military lending protections. This enforcement action demonstrates the CFPB's commitment to protecting servicemembers from predatory lending practices and ensuring that companies properly implement the safeguards Congress established for military families.
Context & Benchmarks
Statewide benchmarks for this case type are not currently available in our database. However, this settlement represents a significant enforcement action in the military lending space and reflects the federal government's continued focus on protecting servicemembers from harmful financial practices.
Sources
- Consumer Financial Protection Bureau: https://www.consumerfinance.gov/about-us/newsroom/cfpb-reaches-settlement-with-firstcash-inc-and-its-subsidiaries-for-military-lending-act-violations/
This is not legal advice.
Sources
FAQ
What types of cases in Washington state typically result in $5 million settlements or verdicts?
Cases involving catastrophic personal injuries, medical malpractice resulting in permanent disability, wrongful death of high earners, product liability with severe injuries, and major commercial disputes often reach $5 million in Washington state.
Are $5 million awards common in Washington state courts?
While $5 million awards are not common, they do occur regularly in Washington state, particularly in King County and other major metropolitan areas where economic damages and jury awards tend to be higher.
How does Washington state law affect large monetary awards like $5 million?
Washington has no statutory caps on non-economic damages in most personal injury cases, allowing juries to award substantial amounts. However, awards may be subject to appeal and reduction if deemed excessive by appellate courts.
What factors do Washington juries consider when awarding $5 million in damages?
Washington juries typically consider medical expenses, lost wages, pain and suffering, loss of enjoyment of life, and future care needs. In wrongful death cases, they evaluate the deceased's earning capacity and family contributions.
How long does it typically take to resolve a $5 million case in Washington state?
Complex cases resulting in $5 million awards often take 2-4 years from filing to resolution in Washington state, depending on the complexity of medical issues, discovery disputes, and court scheduling.
This content is for informational purposes only and is not legal advice.