Marlin Financial, a Miami-based auto lender, stopped originating auto loans on Sept. 26, as the company undergoes changes to its business practices enforced by the state attorney general, a company spokeswoman told Auto Finance News.
“All the recent policy changes [Marlin Financial] is doing, we are going through the attorney general, and that is the only person we are communicating with,” the spokeswoman said. She added that the company is unable to give any updates and all changes will be announced through the Florida attorney general’s office.
Marlin Financial’s website, www.MarlinCash.com, notes the lender has stopped accepting new customers. However, the company’s status remains “active,” according to the Florida Department of State business records. What remains uncertain is what updates the attorney general is making to the lender’s business practices and how these changes will affect its customers.
Attorney General Pam Bondi opened an investigation of Marlin Financial following a Tampa Bay Times story published last month. The story uncovered a pattern of consumers claiming they were charged interest rates that exceed the state maximums and were effectively forced to agree to debt-cancellation products that were priced at $25,000.
Following the story, U.S. Rep. Charlie Crist (D-St. Petersburg) wrote a letter urging the Consumer Financial Protection Bureau to investigate Marlin Financial, according to Tampa Bay Times. However, it is unclear if the consumer watchdog responded to Crist’s efforts.
“The withdrawal of the consumer watchdog is causing states to feel like they have to step in where the government is pulling back,” Patty Covington, attorney at Hudson Cook, previously told AFN. Although lenders may have heard a sigh of relief as regulations lightened up, Covington warns that with attorneys general stepping in, that relief is “being dismantled” as stricter state regulation can be more dangerous because “there are more of them,” she said.
With midterm elections coming up in November, it will be interesting to see how financial services enforcement pans out, “particularly with the amount of blue attorneys general that come in place,” Covington said. More blue attorneys general means the trend of tighter state regulations could take place, especially as more states — even conservative states — have already boosted regulations.