CFPB Reaches Settlement with FirstCash, Inc. and Its Subsidiaries for Military Lending Act Violations

Key dates

2016-10-03

Beginning of the period for which the CFPB alleged FirstCash made MLA-covered pawn loans exceeding the 36% cap and used noncompliant agreements and disclosures.

2021-11-12

The CFPB filed its lawsuit against FirstCash, Inc. and 19 subsidiaries alleging Military Lending Act violations.

2025-07-11

The parties filed the stipulated final judgment and proposed order, and the court entered the judgment resolving the lawsuit; the order imposed $5 million in redress, a $4 million civil penalty, and prospective MLA compliance requirements.

2025-07-22

The CFPB terminated the 2013 Cash America consent order after determining that the predecessor had fulfilled its obligations, including paying a $5 million penalty and providing consumer redress.

Suggested considerations

• Compliance teams at creditors offering potentially MLA-covered consumer credit should consider mapping every product, including pawn loans, against the definition of consumer credit and testing whether fees and charges are included in the 36% Military Annual Percentage Rate calculation under 32 C.F.R. § 232.3(i).
• Firms should consider implementing documented procedures to determine covered-borrower status before or at account opening, using the Department of Defense database or another permitted method under the safe harbor in 32 C.F.R. § 232.5(b), and retaining the required evidence and timing records.
• Legal and product teams may wish to review loan agreements, disclosures, and servicing scripts for mandatory arbitration provisions and for all MLA disclosures required by 32 C.F.R. § 232.6, including the applicable payment-obligation and covered-borrower notices.
• Affected lenders should consider identifying loans made to servicemembers and covered dependents from October 3, 2016 onward, assessing potential MAPR, disclosure, and arbitration exposure, and evaluating remediation where historical controls were inadequate.
• Governance functions may wish to assign ownership for MLA compliance across underwriting, point-of-sale systems, branch operations, vendor management, complaint handling, and internal testing, with escalation for products that cannot reliably screen covered borrowers.
• Firms should consider reviewing the judgment and any applicable CFPB redress procedures before calculating restitution, and should avoid treating the termination of the predecessor’s 2013 consent order as relief from the separate FirstCash obligations.

What changed

The July 11, 2025 stipulated final judgment, entered by the court the same day, requires FirstCash and its subsidiaries to set aside $5 million to provide full redress in connection with thousands of unlawful pawn loans and pay $4 million to the CFPB victims relief fund. Going forward, the defendants must comply with the Military Lending Act, 10 U.S.C. § 987, and its implementing regulation, 32 C.F.R. part 232, including the 36% MAPR limit, the prohibition on mandatory arbitration, and required disclosures. The order permits compliance through either offering an MLA-compliant pawn-loan product to covered servicemembers and their families or using the regulatory safe harbor designed to screen for MLA-protected borrowers. On July 22, 2025, the CFPB terminated the 2013 Cash America consent or

Who is affected

• FirstCash, Inc. and its 19 U.S. pawn-lending subsidiaries
• U.S. pawnshops and other creditors offering consumer credit that may be subject to the Military Lending Act
• Active-duty servicemembers and covered dependents seeking consumer credit
• Consumer-credit providers subject to 10 U.S.C. § 987 and 32 C.F.R. part 232

Related regulations

• Military Lending Act, 10 U.S.C. § 987
• 32 C.F.R. part 232, Department of Defense Military Lending Act implementing regulation
• 32 C.F.R. § 232.3(i), Military Annual Percentage Rate definition
• 32 C.F.R. § 232.5(b), covered-borrower identification safe harbor
• 32 C.F.R. § 232.6, required disclosures