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ARTICLE · 08 SEPTEMBER 2025

CFPB Secures Permanent Ban On Fintech Service Provider For Alleged Unfair Practices

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On August 21, the CFPB filed a complaint and stipulated final judgment in the U.S. Bankruptcy Court for the Central District of California against a fintech service provider in Chapter 11 proceedings.

United StatesTechnology
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
Maxwell Earp-Thomas
Maxwell Earp-Thomas
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On August 21, the CFPB filed a complaint and stipulated final judgment in the U.S. Bankruptcy Court for the Central District of California against a fintech service provider in Chapter 11 proceedings. The Bureau alleged violations of the Consumer Financial Protection Act (CFPA), asserting the company engaged in unfair acts and practices by failing to maintain accurate custodial records of consumer funds. The stipulated order, entered with the consent of the Chapter 11 Trustee, permanently bars the company from participating in a range of consumer financial activities.

The Bureau's allegations centered on the fintech's role in connecting nonbank platforms with partner banks for deposit accounts, debit cards, and payment processing. According to the complaint, beginning in 2023, the fintech operated a cash management program that swept deposits into omnibus accounts at multiple partner banks. The Bureau alleged that the company engaged in unfair practices, including:

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