Mariner Finance Accused of Predatory Lending Practices by Five States & D.C.
Mariner Finance, a loan company controlled by a large private-equity firm, is engaged in a nationwide scheme that takes advantage of low- and moderate-income consumers, according to a lawsuit filed by the attorney generals of five states: Pennsylvania, New Jersey, Utah, Washington, Oregon, and the District of Columbia. The lawsuit alleges that the company: (1) adds expensive insurance policies and other products to loans without the borrowers' knowledge, and (2) deceptively gets them to refinance their debts to produce even more fees for the company. Mariner Finance is owned by an investment fund managed by Warburg Pincus, a Wall Street private-equity firm. Its president is Timothy F. Geithner, who, as President Obama's treasury secretary, condemned predatory lenders. Executives at Warburg Pincus and the lender denied any wrongdoing. Mariner has over 480 branches in 27 states and manages $2 billion in loans every year, according to the lawsuit.
State officials began investigating Mariner Finance after the Washington Post published a 2018 story on the company and private-equity firms' roles in consumer lending. The article detailed the company’s practice of mass-mailing live checks to consumers who, if they cashed them, were obligated to repay the money at interest rates of over 30%. The lawsuit said that Mariner’s targets “are often in financial crisis, decidedly unfamiliar with receiving unsolicited checks in the mail, and in desperate need of economic relief.” “Mariner uses live checks as an entrée to the most vulnerable portion of the targeted population.”
According to a 2018 Washington Post article, the company "enables some of the nation’s wealthiest investors and investment funds to make money offering high-interest loans to cash-strapped Americans."
