FirstCash investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than March 15, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired FirstCash Holdings, Inc. (“FirstCash”) (NASDAQ: FCFS) common stock between February 1, 2018 and November 12, 2021, both dates inclusive (the “Class Period”).
Case Background:
FirstCash owns and operates pawn stores in the United States and Latin America. As of December 31, 2020, FirstCash operated over 2,700 pawn stores, with more than 1,000 located in the United States. The Military Lending Act (“MLA”) provides protections for active-duty service members and their dependents in connection with the extension of consumer credit. The MLA limits the interest rates that may be charged on consumer loans to active-duty armed forces members and their covered dependents to no more than 36%. In November 2013, Cash America International, Inc. (which subsequently merged with FirstCash) entered into a Consent Order with the Consumer Financial Protection Bureau (“CFPB”) for making loans to covered members of the military or their dependents in violation of the MLA, violations relating to debt collection, failure to prevent or timely detect problematic conduct due to inadequate internal compliance, and failure to maintain required records (the “Order”).
In 2015, the Department of Defense expanded the MLA to cover more credit products, including pawn loans. Newly covered creditors, which included pawn brokers, had until October 3, 2016 to bring their operations into compliance with the new rules. In response to the expansion of the MLA, which prohibited FirstCash from issuing loans with interest rates higher than 36%, FirstCash claimed that it was “unable to offer any of its current credit products, including pawn loans, to members of the U.S. military or their dependents.” FirstCash also claimed that throughout the Class Period it employed robust systems, policies, and procedures to ensure its regulatory compliance and adherence to applicable laws, rules and regulations governing its business, including the MLA.
The truth emerged on November 12, 2021, when the CFPB announced that it had filed a complaint against FirstCash for violations of the MLA and the Order. The CFPB complaint alleged that “between June 2017 and May 2021 (the only period for which the Bureau currently has Defendants’ transactional data), [FirstCash and its subsidiary Cash America West, Inc.] together made over 3,600 pawn loans to more than 1,000 covered borrowers in Arizona, Nevada, Utah, and Washington.” The CFPB found that, in all of the loans at issue, FirstCash imposed interest rates over 36%, with rates frequently exceeding 200%. Additionally, the CFPB found that FirstCash’s usurious loan practices had been ongoing since at least October 2016 in violation of the Order.
Following this news, the price of FirstCash common stock dropped from $85.84 per share when the market closed on November 11, 2021, to $78.64 per share on November 12, 2021, an 8% decline.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (1) FirstCash had made more than 3,600 loans to over 1,000 active-duty members of the military and their families at usurious interest rates above 36% – and often exceeding 200% – in violation of the MLA and the Order; (2) FirstCash had failed to implement the remedial measures imposed by the Order; (3) FirstCash’s financial results were, in substantial part, the product of its violations of the MLA and the Order; and (4) as a result of the foregoing, FirstCash was exposed to a material undisclosed risk of legal, reputational and financial harm if FirstCash’s violations of the MLA and the Order were ever publicly disclosed.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.