NEW YORK–(BUSINESS WIRE)–The law firm Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Northern District of Texas on behalf of those who acquired FirstCash Holdings, Inc. (“FirstCash” or the “Company”) (NASDAQ: FCFS) ordinary shares from February 1, 2018 to November 12, 2021 inclusive (the “Class Period”). Investors have until March 15, 2022 to ask the Court to be named lead plaintiff in the lawsuit.
FirstCash owns and operates pawnshops in the United States and Latin America. Through its pawnshops, FirstCash provides non-recourse pawnshops and purchases goods to customers to meet their short-term cash flow needs.
In September 2016, FirstCash completed its merger with pawnbroker and payday lender Cash America International, Inc. (“Cash America”). In November 2013, Cash America entered into a consent order with the Consumer Financial Protection Bureau (“CFPB”) for providing loans to covered members of the military or their dependents in violation of Military Lending regulations Debt Act (“MLA”). collection, failure to prevent or timely detect problematic conduct due to inadequate internal compliance and failure to maintain required records (the “Order”). In the Order, Cash America agreed to cease and desist from violations and to implement a plan designed to ensure its future compliance with the terms of the Order. The CFPB fined Cash America $5 million and ordered it to deposit $8 million into an account to provide relief to affected consumers.
On November 12, 2021, the CFPB announced that it had filed a complaint against FirstCash for breaching the MLA and the Order. The CFPB complaint alleged that “[b]between June 2017 and May 2021 (the only period for which the Bureau currently has transactional data from defendants), [FirstCash and its subsidiary Cash America West, Inc.] together have issued more than 3,600 pledge loans to more than 1,000 covered borrowers at stores in Arizona, Nevada, Utah and Washington. The CFPB found that, for all the loans at issue, FirstCash charged interest rates in excess of 36%, with rates frequently exceeding 200%. Additionally, the CFPB found that FirstCash’s loan sharking practices had been ongoing since at least October 2016 in violation of the order. A CFPB statement outlining the agency’s action against FirstCash said FirstCash had “deceived” and “defrauded” military families and “deprived them of their right to go to court.” On this news, FirstCash’s stock price declined $7.50 per share, or approximately 8.7%, from $86.14 per share to close at $78.64 per share on November 12, 2021.
The lawsuit alleges throughout the class action period that the defendants made false and misleading statements and failed to disclose that: (i) FirstCash issued over 3,600 loans to over 1,000 active duty military personnel and to their families at usurious interest rates above 36% – and often exceeding 200% – in violation of the MLA and the Ordinance; (ii) FirstCash failed to implement the corrective measures imposed by the order; (iii) FirstCash’s financial results were, in large part, the product of FirstCash’s violations of the MLA and the Order; and (iv) as a result, FirstCash was exposed to material undisclosed risk of legal, reputational and financial harm if FirstCash’s violations of the MLA and the Order were ever publicly disclosed.
If you have purchased or otherwise acquired FirstCash securities, have information or wish to inquire about such claims, please contact Thomas W. Elrod of Kirby McInerney LLP by email to [email protected], or by completing this Contact formto discuss your rights or interests in relation to these matters at no cost to you.
Kirby McInerney LLP is a New York-based law firm specializing in securities, antitrust, whistleblower and consumer litigation. The company’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm is available on the Kirby McInerney LLP website: http://www.kmllp.com.
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