SALT LAKE CITY — The consumer bureau being defunded by the Trump Administration has dismissed its lawsuit against a Draper-based company selling rent-to-own agreements.
The Consumer Financial Protection Bureau on Thursday filed a motion in federal court in Salt Lake City saying it “dismisses with prejudice” its lawsuit against the firm known as Acima.
The CFPB, as the federal agency is known, is being defunded by the Trump Administration.
Sen. Mike Lee, R-Utah, has long complained about the CFPB and co-sponsored legislation to defund it. Lee and other critics say that since the bureau receives money directly from the Federal Reserve rather than appropriations from Congress, the bureau isn’t accountable to Congress.
Conservatives have also called the CFPB redundant, saying other agencies can do its job.
Chris Peterson, a University of Utah law professor and former Democratic candidate for governor who used to work at the CFPB, said it’s unlikely any other regulator will pick up the Acima case.
“Congress created the CFPB to do precisely this type of activity,” Peterson said, “and now, without any authorization from Congress, the agency that's responsible for doing this is being stood down and essentially wiped out.
“And that's really not consistent with the way the Constitution was designed.”
The Acima lawsuit had not yet entered a verdict or judgment phase, and the company had denied the CFPB allegations in court.
Acima offers “rent-to-own” agreements for consumers to acquire household goods. The CFPB accused Acima of “deceptive” practices. Acima is a subsidiary of Rent-A-Center, though that parent company is not a party in the lawsuit.
One of Acima’s attorneys is the brother of new U.S. Attorney General Pam Bondi, according to court records and a profile of Bondi and her family published by Open Secrets.
Data from the bureau says over more than 13 years, it took action on 29,767 complaints filed by Utahns. The most common of those were about credit reporting or credit repair services.
The CFPB says it’s collected $29 million in civil penalties for Utahns since 2010, sometimes working with state government. In 2018, the Utah Division of Consumer Protection announced the Beehive State was receiving $10 millionfrom a settlement the CFPB negotiated with Wells Fargo.
Peterson, while acknowledging the Acima allegations had not yet been proven, called the dismissal of the Acima lawsuit “a troubling precedent.” Not only is it unlikely other regulators would take up the case, he said any consumers with complaints would be unlikely to find attorneys willing to pursue the company for losses that typically run a few hundred or a few thousand dollars.
For the moment, the CFPB is still suing one other company in Utah. Snap offers “rental-purchase” or “lease-purchase” financing for merchandise. The CFPB has accused it, too, of deceptive practices. Snap has denied the allegations.