The Department of Justice issued a subpoena to Consumer Portfolio Services on January 14, according to an 8-K filed with the Securities and Exchange Commission last week.
The filing describes the DOJ subpoena as “a civil investigative subpoena from the U.S. Department of Justice pursuant to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. The subpoena directs us to produce documents relating to our subprime automotive finance and related securitization activities.”
CPS was ordered to pay more than $5.5 million by the Federal Trade Commission in May, to settle charges stemming from what the FTC called “illegal tactics” to service and collect consumers’ loans, including collecting money consumers did not owe, harassing consumers and third parties, and disclosing debts to friends, family and employers.
In the latest filing on January 22, CPS wrote: “Other purchasers of subprime automotive receivables have disclosed receiving similar requests at various times since July 2014.”
It was announced in August that DOJ had issued subpoenas to GM Financial and Santander Consumer USA for documents related to those companies’ subprime practices. Most recently, in December, Toyota Financial Services, American Honda Finance Corp, Credit Acceptance Corp., and Ally Financial Inc. all revealed in SEC filings that the DOJ was investigating the finance companies’ subprime lending as well.
