Acima Leasing Files Lawsuit Against CFPB: Legal Battle Over Regulatory Authority

Acima Leasing, a subsidiary of Upbound Group, has taken a bold step by filing a lawsuit against the U.S. Consumer Financial Protection Bureau (CFPB) in the Eastern District of Texas. The lawsuit aims to challenge what Acima claims is the CFPB’s illegal attempt to expand its authority beyond federal law limitations and override existing state regulations for the lease-to-own industry.

Acima argues that the CFPB lacks statutory authority to bring enforcement action against it, as its flexible lease-to-own transactions do not qualify as credit, loans, or financing under relevant federal statutes. The company asserts that its transactions are already comprehensively regulated by state laws and that the CFPB’s efforts conflict with these regulations.

This lawsuit follows a previously disclosed CFPB investigation of Acima that began before Upbound’s acquisition in 2021. Despite the ongoing investigation, Acima maintains an A+ rating with the Better Business Bureau and a strong net promoter score of 70 for returning customers, highlighting the value of its lease-to-own solutions.

The legal battle between Acima and the CFPB could have significant implications for the lease-to-own industry. If Acima’s challenge is successful, it might limit federal oversight and uphold state-level regulatory frameworks, benefiting other companies in similar businesses. However, a loss could subject Acima and potentially other lease-to-own businesses to stricter federal regulations, increasing compliance costs and operational complexities.

Investors are advised to closely monitor this case as it progresses through the courts. The outcome could impact Upbound Group’s financials in the short term and have broader implications for the regulatory landscape of the lease-to-own industry. Stay tuned for updates on this developing story.