Payday Lender Sued For Allegedly Threatening Consumers

The Consumer Financial Protection Bureau filed a lawsuit  against an offshore payday lender on Tuesday.

The bureau alleges that NDG Enterprise illegally collected loan payments that consumers did not have to pay -- violating the Dodd-Frank Act, which Congress passed in 2010 to reform the country's financial system.

NDG Enterprise, which operates in all 50 states, is accused of illegal practices that include falsely threatening consumers with lawsuits or imprisonment and using wage-assignment clauses to directly take money from consumers' payroll accounts.

Earlier this year, the CFPB proposed stricter regulations  for payday loans, which have high interest rates and short terms, to prevent consumers from having to keep borrowing to pay off debts.

“We are taking action against the NDG Enterprise for collecting money it had no right to take from consumers,” said CFPB Director Richard Cordray in a statement. “Companies making loans within the U.S. have to comply with federal law, and the Consumer Bureau will work to ensure that American consumers receive the protections and fair treatment they deserve.”

The CFPB says it wants NDG to repay everyone the lender is accused of illegally taking money from.

NDG did not immediately respond to a request for comment.