GreenSky Enters Into an Agreement with the CFPB to Resolve a Previously-Disclosed Inquiry

Rhea-AI Summary

GreenSky (NASDAQ: GSKY) has reached a settlement with the Consumer Financial Protection Bureau relating to consumer complaints about allegedly unauthorized loans. The company will pay a civil penalty of $2.5 million and provide redress for consumers capped at $3 million in cash and $6 million in loan cancellations. As of June 30, 2021, GreenSky had fully reserved for this matter. President Tim Kaliban expressed pride in their consumer advocacy efforts and noted that the resolution allows the company to focus on growth and strengthening business integrity.

Positive

• Settlement allows GreenSky to focus on growth and strengthening business integrity.
• Company fully reserved for the inquiry, suggesting financial preparedness.

Negative

• Settlement of $2.5 million could impact short-term cash flow.
• Consumer redress may indicate compliance issues affecting reputation.

GreenSky, Inc. (NASDAQ: GSKY) today announced that it has entered into an agreement with the Consumer Financial Protection Bureau (“CFPB”) to resolve the previously-disclosed inquiry related to consumer complaints about certain allegedly unauthorized loans. Without admitting any liability or wrongdoing, GreenSky has agreed to pay a civil money penalty of $2.5 million and to provide redress to eligible consumers where there is insufficient evidence of customer authorization that will be capped at $3 million in cash redress (with a minimum remittance of $750,000) and capped at $6 million in credit redress via loan cancellations. As of June 30, 2021, the Company was fully reserved with respect to this matter.

GreenSky President Tim Kaliban said: “We are exceedingly proud of our record of consumer advocacy and have already implemented many of the protocols and business practices called for by the agreement, which protocols and practices have been very well received by our merchants and will only serve to enhance our best-in-class merchant and consumer experience. The resolution of this matter also allows us to devote our full and undivided attention to growing and strengthening our business, which is built on a foundation of integrity and trust. We cooperated fully with the CFPB in connection with its inquiry and respect and value the important role it plays in regard to consumer protection.”

About GreenSky, Inc.

GreenSky, Inc. (NASDAQ: GSKY), headquartered in Atlanta, is a leading technology company Powering Commerce at the Point of Sale^® for a growing ecosystem of merchants, consumers and banks. Our highly scalable, proprietary and patented technology platform enables merchants to offer frictionless promotional payment options to consumers, driving increased sales volume and accelerated cash flow. Banks leverage our technology to provide loans to super-prime and prime consumers nationwide. We currently service a $9.3 billion loan portfolio, and since our inception, approximately 3.9 million consumers have financed approximately $29 billion of commerce using our paperless, real time “apply and buy” technology. For more information, visit https://www.greensky.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210712005772/en/

FAQ

What is the recent settlement amount for GreenSky with the CFPB?

GreenSky has agreed to pay a civil penalty of $2.5 million as part of its settlement with the CFPB.

What are the total caps for consumer redress in the GreenSky settlement?

The total consumer redress is capped at $3 million in cash and $6 million in loan cancellations.

What is the stock symbol for GreenSky?

GreenSky trades under the stock symbol GSKY.

When did GreenSky announce its settlement with the CFPB?

GreenSky announced the settlement on July 12, 2021.

What is the purpose of GreenSky's technology platform?

GreenSky's technology platform enables merchants to offer promotional payment options to consumers, driving increased sales volume.