Defend Your Rights Against Military Payday Loan CashNetUSA Abuses

Yes, the MLA may apply to a CashNetUSA transaction if the borrower was a covered borrower at the relevant time and the credit falls within the law’s definition of covered consumer credit.

Department of Defense regulations define a covered borrower based on the consumer’s status when the person becomes obligated on the credit transaction or establishes a consumer-credit account. Covered borrowers can include qualifying active-duty servicemembers and certain dependents.

The CFPB explains that payday loans, many installment loans, overdraft lines of credit, and several other forms of consumer credit can fall within the MLA, although the law also has specific exclusions.

The exact CashNetUSA product matters. CashNetUSA’s current website lists different types of credit depending on the state, including lines of credit and installment-style products. That is one reason we do not assume every CashNetUSA account was legally a “payday loan” simply because a borrower uses that term.

Why Active-Duty Timing is Important

One of the first questions to ask is: Were you or your qualifying spouse on active duty when the CashNetUSA credit was obtained?

The MLA’s covered-borrower rules focus on military or dependent status at the time the consumer becomes obligated on the transaction or opens the credit account.

That means your status today does not necessarily answer whether military lending protections were relevant when a past loan was made. If you are retired or separated now but received the credit during qualifying active-duty service, the circumstances at that earlier time may still be important when reviewing the transaction.

If you remember taking out a CashNetUSA loan during active duty but are unsure of the date, your loan documents, account records, bank statements, and military records may help establish the timeline.

What Parts of a CashNetUSA Loan May Be Worth Reviewing?

The cost of the credit is not the only possible issue under the MLA. Federal law and Department of Defense regulations also restrict certain terms and practices involving covered consumer credit, including some forms of mandatory arbitration, waiver of legal rights, military allotments, refinancing or rollover practices, and prepayment restrictions.

For a CashNetUSA loan obtained during active-duty service, useful records may include your loan agreement and disclosures, the date the credit was extended, APR and fee information, payment history, bank statements showing withdrawals, refinancing or renewal records, and documents showing military status at the relevant time.

You do not need to calculate MAPR or decide for yourself whether the MLA was violated. Those documents can help an attorney understand what happened and which rules may be relevant.

How Lenders Can Determine Whether You Are a Covered Borrower

Federal regulations give creditors several ways to determine whether a consumer is a covered borrower under the MLA. A lender may use the Department of Defense database or a qualifying indicator from a nationwide consumer reporting agency. If the creditor follows the timing and recordkeeping requirements, that determination can provide a regulatory safe harbor. The check generally must occur when the consumer initiates the transaction, applies for the account, or within 30 days beforehand. 

For a CashNetUSA account opened during active duty, application records and account-opening dates may help show how military status was evaluated when the credit was extended.

What Disclosures Must a Covered Borrower Receive?

The MLA also requires specific disclosures when covered consumer credit is extended to a covered borrower. Before or when the borrower becomes obligated, the creditor generally must provide a statement about the applicable MAPR, disclosures required by Regulation Z, and a clear description of the payment obligation. Certain MLA information must be provided in writing in a form the borrower can keep. 

The creditor must also provide the MAPR statement and payment-obligation information orally, either in person or through a toll-free telephone number. These requirements can make the original loan documents and application materials important when reviewing a CashNetUSA transaction.

What Remedies May Follow an MLA Violation?

If a covered credit agreement violates the MLA, federal law provides remedies that may go beyond lowering the interest rate. A prohibited agreement can be void from its inception. A borrower may be able to seek actual damages, with a statutory minimum of $500 for each violation, along with appropriate punitive, equitable, or declaratory relief. 

In a successful civil action, reasonable attorney fees and court costs may be recoverable. These remedies are not automatic in every dispute. Available defenses and filing deadlines can affect a claim, so the transaction date and the date a violation was discovered may also matter.

Don’t Let the Scammers Win

Ready to fight back? Tell Varnell & Warwick how CashNetUSA imposters targeted you, and let’s find out if a class action lawsuit can help recover your financial losses.