On January 23, 2019, the CFPB announced a settlement with Mark Corbett following an investigation by the Bureau, the Arkansas Attorney General, and the South Carolina Department of Consumer Affairs into Mr. Corbett’s brokerage of contracts offering high-interest credit to veterans. As detailed in the consent order, Mr. Corbett facilitated high-interest contracts between veterans and investors marketed as purchases of the veterans’ future pension and disability payments. Pursuant to the contracts, veterans would receive a lump-sum payment from investors in an amount ranging from a few thousand to tens of thousands of dollars, and would then be obligated to repay the investors by assigning to the investors all or part of the veterans’ pension or disability payments. The repayment obligations typically lasted from five to ten years, and resulted in a repayment amount far greater than the initial lump-sum payment.
The Bureau found Mr. Corbett violated Sections 1031 and 1036 of the Consumer Financial Protection Act of 2010 (“CFPA”) by: (i) misrepresenting to consumers that the contracts were valid and enforceable when, in fact, the contracts were void because the veterans’ pension payments are unassignable under federal law; (ii) misrepresenting to consumers that the contracts involved a purchase of payments rather than high-interest credit; (iii) misrepresenting to consumers when they would receive funds under the contracts; and (iv) failing to disclose to consumers the applicable interest rate for the credit offered by the contracts.
The consent order permanently restrains Mr. Corbett from brokering, offering, and arranging contracts between veterans and third parties under which the veteran purports to sell a future right to an income stream in the veteran’s pension or disability payments. The consent order also requires Mr. Corbett to pay a civil money penalty of $1 to the Bureau, an amount based upon sworn financial payments submitted by Mr. Corbett indicating an inability to pay.
Mr. Corbett consented to the issuance of the consent order without admitting or denying any of the findings of fact or conclusions of law, except that he admitted the facts necessary to establish the Bureau’s jurisdiction over him and the subject matter of the action.
Consumer advocates criticized the settlement for the low amount of the civil money penalty. The Center for Responsible Lending issued a statement criticizing “the Trump-appointed political leadership at the CFPB” for “letting a person who preyed on veterans get away with a slap on the wrist.”