Security National Automotive Acceptance Co., a subprime auto lender that primarily serviced used loans to military members, is closing its doors.
The company began informing employees and auto dealers Wednesday that it would discontinue purchasing auto contracts and liquidate its portfolio, which will be transferred to an unnamed third party, according to a spokeswoman.
"The risk adjusted returns in today's market do not meet the thresholds SNAAC had set to ensure profitable and sustained growth which led us to this decision," the company said in a statement. SNAAC has approximately 150 employees.
In 2015, the Consumer Financial Protection Bureau ordered SNAAC to pay $2.275 million in redress and civil penalties for what it called illegal debt collection tactics, which included "making threats to contact service members' commanding officers about debts and exaggerating the consequences of not paying," the CFPB said in a statement.
Two years later, the bureau accused SNAAC of violating the order when it did not fulfill the refund and credit promise, which affected more than 1,000 customers. The CFPB issued a second consent order for the lender to "make good" on its promises and pay an additional $1.5 million.
"Acting on a tip from a service member's father, the CFPB discovered that SNAAC had issued worthless 'credits' to hundreds of consumers and failed to provide proper redress to many more," the CFPB said.
SNAAC, based in Mason, Ohio, will continue to accept credit applications through Monday, the statement said. The last day to purchase any contract with the lender is Aug. 19. SNAAC will continue servicing its auto portfolio through mid-September.