FirstCash, a Delaware corporation that operates over 1,000 retail pawnshops across the United States, will pay $4 million in civil penalties and set aside $5 million for consumer redress under a stipulated final judgment entered by a federal court. The settlement resolves the CFPB's November 2021 lawsuit alleging systematic violations of federal protections for active duty servicemembers and their dependents.
The CFPB alleged that since October 2016, FirstCash violated the Military Lending Act by making pawn loans to covered borrowers with annual percentage rates exceeding the law's 36% cap. The agency also claimed the Fort Worth, Texas-based company's loan agreements illegally required arbitration clauses and failed to provide mandatory disclosures to servicemembers. The MLA establishes specific protections for military families, including rate caps, arbitration prohibitions, and disclosure requirements.
Under the settlement terms, FirstCash must establish a $5 million fund to provide full redress to harmed servicemembers and their families in connection with thousands of allegedly unlawful pawn loans. The company will also pay $4 million to the CFPB's victims relief fund. Going forward, FirstCash must either offer MLA-compliant loan products to servicemembers or implement regulatory safe harbor procedures to screen for MLA-protected borrowers.
The enforcement action follows a pattern of CFPB scrutiny of Military Lending Act compliance across the financial services industry. The case also resolved violations of a separate 2013 consent order against Cash America International, Inc., a predecessor entity that FirstCash had acquired. That earlier order required a $5 million penalty and consumer redress, obligations the CFPB said were fulfilled before terminating the 2013 order on July 22, 2025.
The settlement demonstrates the CFPB's continued focus on protecting military families from predatory lending practices. The Military Lending Act's 36% rate cap and other protections are designed to prevent servicemembers from falling into debt traps that could compromise their military readiness and financial security.