FIRSTCASH ALERT: Bragar Eagel & Squire, PC announces that a class action lawsuit has been filed against FirstCash Holdings, Inc. and encourages investors to contact the company
NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, PC, a nationally recognized shareholder rights attorney, announces that a class action lawsuit has been filed against FirstCash Holdings, Inc. (“FirstCash” or the “Company”) (NASDAQ: FCFS) in the United States District Court for the Northern District of Texas on behalf of all individuals and entities that purchased or otherwise acquired FirstCash Securities between February 1, 2018 and November 12, 2021, both dates inclusive (the “Collection Period”). Investors have until March 15, 2022 to petition the court to be named lead plaintiff in the lawsuit.
click here to take part in the action.
In September 2016, the company, then known as First Cash Financial Services Inc., completed its merger with pawn shop and payday lender Cash America International, Inc. (“Cash America”). Following the merger, the merged company changed its name to FirstCash Inc. Similarly, following a merger with lending firm American First Finance in December 2021, the company changed its name again to FirstCash Holdings, Inc.
The Military Lending Act (“MLA”) provides protections for active duty members and their dependents in connection with the provision of consumer credit. Among other safeguards, the MLA limits the interest rate that can be charged on consumer loans to active-duty military personnel and their insured dependents to no more than 36%. In addition, the MLA prohibits lenders from requiring affected parties to submit to arbitration and imposing other restrictions.
In November 2013, Cash America entered into a consent order with the Consumer Financial Protection Bureau (“CFPB”) for providing credit to insured military personnel or their dependents in violation of the MLA, violations related to debt collection, failure to prevent or timely identify problematic behavior due to insufficient internal compliance and failure to maintain required records (the “Assignment”). In the order, Cash America agreed to cease and desist from the violations and to implement a plan designed to ensure future compliance with the terms of the order. The CFPB fined Cash America $5 million and ordered it to deposit $8 million into an account to redress the affected consumers.
In 2015, the Department of Defense expanded the MLA to cover more lending products, including pawn loans. Newly covered creditors, which included pawnbrokers, had until October 3, 2016 to adjust their operations to the new regulations.
In response to the MLA’s expansion, which prohibited the company from lending at interest rates higher than 36%, FirstCash claimed that it was “unable to offer any of its current lending products, including pawn loans, to members of the U.S. military.” or their dependents.” The company also alleged that during the class action period it employed robust systems, policies and procedures to ensure legal compliance and compliance with applicable laws, rules and regulations for its business, including the MLA.
Despite these assurances, throughout the class-action period, unbeknownst to investors, FirstCash had been involved in widespread and systemic violations of the MLA and had made thousands of loans to active-duty members and their dependents at usurious rates. On November 12, 2021, the CFPB filed a lawsuit alleging that FirstCash and its subsidiary Cash America West, Inc. violated the MLA by charging a higher than allowable effective lien on over 3,600 mortgage loans from more than 1,000 assets would have charged annual interest of 36% – those on duty and their dependents. The CFPB also alleged that FirstCash violated the 2013 CFPB regulation prohibiting future MLA violations, which remained in effect and applied to FirstCash after the company’s merger with First Cash America in September 2016
As a result of these revelations, FirstCash stock price plunged over $7 per share, or 8%, in a single day to close at $78.64 per share on November 12, 2021 on unusually high trading volume. The stock continued to fall over the following days as the market digested the news, falling another $10 per share by November 18, 2021.
If you have purchased or otherwise acquired FirstCash stock and have suffered a loss, are a long-term shareholder, have information, would like to learn more about these claims, or have any questions about this announcement or your rights or interests related to these matters, please contact us Brandon Walker or Alexandra Raymond via email at [email protected], phone at (212) 355-4648, or via fill out this contact form. There are no costs or obligations for you.
About Bragar Eagle & Squire, PC:
Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation in state and federal courts across the country. More information about the company can be found at www.bespc.com. attorney advertising. Previous results do not guarantee similar results.