CFPB Drops Case Against Rent-a-Center Unit In Latest Pullback

The CFPB’s voluntary dismissal with prejudice of its lawsuit against Acima represents a significant legal victory for Upbound Group. This dismissal terminates all claims permanently, preventing the CFPB from refiling similar charges in the future. The resolution comes with no financial penalties, no mandated business practice changes, and no injunctive relief – essentially a complete vindication for Acima.

This outcome is particularly noteworthy considering the CFPB’s typically aggressive enforcement posture. The agency rarely abandons litigation voluntarily, especially after investing resources in a multi-year investigation. The resolution suggests either fundamental weaknesses in the CFPB’s case or strategic considerations about establishing unfavorable precedent regarding its jurisdictional authority over lease-to-own arrangements.

The reciprocal dismissal of Acima’s challenge to CFPB authority in Texas federal court represents a pragmatic compromise. While Acima forgoes the opportunity to potentially limit CFPB oversight broadly, it achieves its immediate objective of eliminating regulatory action against its own operations. This balanced resolution removes significant regulatory uncertainty while allowing Acima to maintain its existing business model intact.

This regulatory resolution substantially improves Upbound Group’s risk profile by removing what represented a significant contingent liability. The dismissal eliminates several potentially costly scenarios that would have impacted shareholder value: monetary penalties, operational restrictions, and reputation damage.

For context, CFPB enforcement actions frequently result in significant financial consequences – firms subject to CFPB consent orders often face $10-50 million penalties plus mandated remediation payments to consumers. Additionally, the agency typically imposes extensive compliance modifications that increase operational costs. Upbound has avoided all these outcomes.

Importantly, this resolution allows management to refocus resources on growth rather than legal defense. The multi-year investigation that preceded this dismissal likely consumed substantial executive bandwidth and legal resources. With this overhang cleared, Acima can operate with greater certainty and invest more confidently in its lease-to-own platform.

The dismissal’s timing is particularly favorable amid the current economic landscape where lease-to-own solutions typically see increased demand during periods of financial constraint for consumers. This resolution positions Upbound to capitalize on growth opportunities in its Acima segment without the cloud of regulatory uncertainty that previously threatened this business line.