Business ProfileforHeights Finance

The following describes a pending government action that has been formally brought by a government agency, but has not yet been resolved.  We are providing a summary of the government’s allegations, which have not yet been proven.  On August 22, 2023 the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Heights Finance Holding Co., f/k/a Southern Management Corporation as well as its wholly owned state licensed subsidiaries including Covington Credit of Alabama, Inc.; Southern Finance of Tennessee, Inc.; Covington Credit of Georgia, Inc.; Southern Finance of South Carolina, Inc.; Covington Credit of Texas, Inc.; Covington Credit, Inc.; and Quick Credit Corporation (collectively Southern).   As stated in the CFPB news release, the CFPB alleges that Southern employs numerous harmful underwriting, sales and servicing practices for their refinanced loans that are designed to churn delinquent borrowers into continuous fee-laden debt which erode the borrowers’ credit and increase their total cost of borrowing with the successive refinancing. The Bureau further alleges that Southern has generated hundreds of millions in loan costs and fees and derives 40% of its net revenue through this process of “Churning” borrowers in repeated, fee-laden refinances. The Bureau alleges that Southern’s loan-churning practices violate the Consumer Financial Protection Act of 2010 being unfair and abusive taking advantage of borrowers’ lack of understanding of the risks, costs or conditions of a refinanced loan. The Bureau is seeking redress for consumers, injunctive relief, and a civil money penalty. The matter is pending.  For more details go here.