Washington, D.C. — In a significant development regarding consumer financial protection and the rights of military families, the Consumer Financial Protection Bureau (CFPB), alongside FirstCash, Inc. and its nineteen corporate subsidiaries, has officially resolved a federal lawsuit originally filed on November 12, 2021. The litigation centered on serious allegations that the nationwide pawnshop operator violated the Military Lending Act (MLA) through its lending practices.
The legal dispute reached its conclusion when the parties successfully negotiated a comprehensive settlement and jointly submitted a stipulated final judgment and proposed order to the court. Demonstrating the swift progression of the resolution, the presiding court promptly entered the order on the very same day it was filed, bringing a definitive close to years of active litigation in the federal court system.
The Military Lending Act is a crucial federal statute designed to safeguard active-duty servicemembers, as well as their eligible dependents, from predatory lending practices and exorbitant financial terms in connection with various extensions of consumer credit. To achieve these safeguards, the statute establishes strict limitations and mandates across the lending industry. Among its core provisions, the MLA imposes a maximum allowable annual percentage rate (MAPR) of 36% on covered consumer credit transactions. Furthermore, the statute expressly prohibits mandatory arbitration clauses in loan agreements with covered borrowers, ensuring that servicemembers retain their legal rights in the event of a dispute. The law also requires lenders to provide specific, mandatory loan disclosures to ensure total transparency regarding the cost of credit before agreements are finalized.
FirstCash, Inc., structured as a Delaware nonbank corporation with its principal place of business located in Fort Worth, Texas, occupies a major footprint in the American retail and financial services sectors. The corporation owns and operates an extensive network of over 1,000 retail pawnshops situated throughout the United States. Through these storefronts and its wholly owned corporate subsidiaries, the company offers a variety of financial products, prominently including pawn loans secured by personal property.
According to the allegations brought forward by the CFPB in its 2021 complaint, FirstCash and its subsidiaries had engaged in widespread statutory violations dating back to October 3, 2016. The Bureau asserted that the defendants routinely violated the MLA by issuing pawn loans to borrowers protected under the act while charging interest rates and fees that substantially exceeded the statutory ceiling of a 36% annual percentage rate. In addition to these rate-related infractions, the CFPB alleged that the standardized loan agreements utilized by the defendants failed to comply with federal law in multiple respects. Specifically, the Bureau stated that these agreements unlawfully required borrowers to submit to mandatory arbitration to resolve disputes, and they omitted critical loan disclosures mandated by the MLA for servicemember transactions.
Beyond the direct statutory infractions under the Military Lending Act, the CFPB’s enforcement action incorporated a historical regulatory component. The Bureau asserted that the alleged MLA violations by FirstCash also constituted direct violations of a prior federal administrative order issued by the Bureau in 2013 against a predecessor entity, Cash America International, Inc.
This historical connection led to a concurrent administrative action regarding the legacy order. On July 22, 2025, in direct alignment with the new settlement and stipulated order secured with FirstCash, the CFPB officially terminated the 2013 consent order that had originally targeted Cash America International, Inc. The Bureau noted that this termination was granted because the predecessor entity had successfully fulfilled all of its legal obligations under the 2013 directive. Those historical requirements included paying a substantial civil money penalty in the amount of $5 million and providing appropriate financial redress directly to affected consumers. Furthermore, the CFPB acknowledged in its administrative findings that the predecessor entity no longer exists as an active corporate enterprise, and the retail and lending products addressed under the historical 2013 order are entirely unconnected to the current business operations and products of FirstCash, Inc.
The newly entered court order imposes binding requirements on FirstCash, Inc. and its nineteen corporate subsidiaries, outlining specific operational boundaries and compliance mandates designed to ensure strict adherence to federal lending protections for military personnel moving forward.
This resolution closes a major chapter of federal oversight regarding FirstCash’s lending history while reaffirming the federal government’s ongoing commitment to enforcing statutory protections for active-duty servicemembers and their families within the consumer credit market.
