New Day Financial, LLC
On February 10, 2015, the Bureau issued an order against New Day Financial, LLC (NewDay), a Maryland-based, nonbank mortgage lender owned by Chrysalis Holdings, a private company focused on originating refinance mortgage loans guaranteed by the United States Department of Veterans Affairs. Beginning in 2010, NewDay entered into a marketing arrangement with a veterans’ organization, pursuant to which NewDay paid “lead generation fees” to the organization and NewDay was named the organization’s “exclusive lender.” NewDay did not disclose to consumers that the veterans’ organization had a financial relationship with NewDay. The Bureau found that this failure to disclose was deceptive in violation of the Consumer Financial Protection Act of 2010. The Bureau also found that NewDay participated in a scheme to pay kickbacks for customer referrals in violation of the Real Estate Settlement Procedures Act. The order required NewDay to come into compliance and pay a $2 million civil money penalty.
Related documents
Press release
CFPB Takes Action Against NewDay Financial for Deceptive Mortgage Advertising and Kickbacks