Defense and Compliance Attorneys
SACRAMENTO – The California Department of Financial Protection and Innovation (DFPI) announced that a Concord-based lender, Apoyo Financiero, Inc., must pay a hefty $1 million penalty for charging excessive interest and fees to its customers. In addition, the company will reimburse customers more than $218,000.
A routine DFPI examination of Apoyo Financiero, Inc. led to the discovery of these violations. Apoyo Financiero, Inc. claims on its website to market its services to the underbanked community in the San Francisco Bay Area. Underbanked individuals often find it difficult to access traditional bank accounts due to poor credit and, therefore, rely on finance lenders and payday loans.
The California Financing Law and the Fair Access to Credit Act set strict limits on the cost of consumer loans of a principal amount between $2,500 and $10,000. DFPI discovered from January 2020 to December 2021, Apoyo Financiero, Inc. made multiple loans with charges that exceeded the legal limit.
“California will not sit idly by as companies flout our laws and overcharge customers for loans. DFPI will continue to take strong action against this type of predatory practice to ensure all lenders operate within the law and return funds to consumers when violations occur,” said DFPI Commissioner KC Mohseni. “It is disheartening to see this kind of practice, particularly when it markets its services to a community that has difficulty accessing traditional banks.”
Apoyo Financiero, Inc. has now agreed to, among other things:
- Reimburse borrowers for illegal charges.
- Pay a $1 million administrative penalty to DFPI.
- Stop collecting any charges that exceed the legal limit.
To date, the company has refunded more than $218,000 to affected consumers and has agreed to issue additional refunds to ensure full compliance.
Consumers who believe they have been charged unlawful interest or fees by a lender are encouraged to contact DFPI atwww.dfpi.ca.gov/submit-a-complaint or by calling toll-free at (866) 275-2677.
About DFPI
The Department of Financial Protection and Innovation protects consumers, regulates financial services, and fosters responsible innovation. DFPI protects consumers by establishing and enforcing financial regulations that promote transparency and accountability. We empower all Californians to access a fair and equitable financial marketplace through education and by helping to prevent potential risks, fraud, and abuse. Learn more at dfpi.ca.gov.
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