On February 22, the Consumer Financial Protection Bureau (CFPB), joined by the attorneys general for Virginia, Massachusetts, and New York (States), filed suit against Libre by Nexus, Inc. (Libre). The suit alleges that Libre, an immigration bond services business, engaged in deceptive and abusive acts or practices in connection with its offer of credit to consumers for their immigration bonds. This suit, the first new public enforcement action of the Biden administration, highlights the theme of anti-discrimination, a stated priority of both the CFPB and Virginia Attorney General Mark Herring.
The complaint alleges 17 causes of action premised on both federal and state law. These claims are based on allegations that Libre exploits primarily Spanish-speaking immigrants held in federal detention by offering to pay for immigration bonds to secure the detainees’ release. In exchange, Libre demands fees and monthly payments, while allegedly concealing or misrepresenting the true costs of its services.
According to the complaint, Libre markets its services to consumers as an easy and affordable alternative method of securing the release of detainees from federal custody, but it is not a surety company certified by the U.S. Treasury or a licensed bail bond agent in any state. Of particular note, the complaint alleges that Libre engaged in “abusive” acts or practices in violation of the Consumer Financial Protection Act. In support of this claim, the complaint focuses on the fact that the vast majority of Libre’s clients and their co-signers are Spanish speakers, with little to no knowledge of English. The CFPB and the States note that Libre specifically markets to these customers with Spanish-language advertisements, but for at least three years used a client agreement written almost entirely in English.
By identifying these alleged acts and practices as “abusive,” the CFPB appears to confirm what panelists at the CFPB’s 2019 Symposium on Abusive Acts and Practices agreed upon. Namely, that a covered person’s act is allegedly abusive if it would harm a particularly vulnerable consumer, not an average consumer, and that the covered person must have specialized knowledge about the vulnerabilities or condition of the particular consumer engaging in a transaction.
This complaint also aligns with stated priorities of the CFPB and Attorney General Herring, who have both stated they will make an effort to target discriminatory practices. This enforcement action reflects tangible action consistent with the CFPB’s public statements to the effect that “[i]t is prioritizing the case to send a strong signal that financial scams targeting communities of color will not be tolerated.”[1] The suit also follows last year’s announcement by Attorney General Herring regarding the creation of an Office of Civil Rights within the Virginia attorney general’s office.[2] These steps appear to send a clear signal to companies that both state and federal agencies will continue to target and prioritize discriminatory acts and practices.
Libre denies all allegations filed against the company.[3] We will continue to monitor this case for further updates.
[1] CFPB, press release, “Consumer Financial Protection Bureau and Virginia, Massachusetts, and New York Attorneys General Sue Libre for Predatory Immigrant-Services Scam” (Feb. 22, 2021) available at https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-and-virginia-massachusetts-and-new-york-attorneys-general-sue-libre-for-predatory-immigrant-services-scam/.
[2] Attorney General Mark R. Herring, News Release, “Herring Launches Office of Civil Rights Within Attorney General’s Office” (Jan. 5, 2020), available at https://www.oag.state.va.us/media-center/news-releases/1912-january-5-2020-herring-launches-office-of-civil-rights-within-attorney-general-s-office.
[3] Michael E. Miller, The Washington Post, “Virginia joins federal lawsuit against company accused of preying on immigrants” (Feb. 22, 2021), available at https://www.washingtonpost.com/local/virginia-joins-federal-lawsuit-against-company-accused-of-preying-on-immigrants/2021/02/22/93d2ee28-754d-11eb-8115-9ad5e9c02117_story.html.