EBay Inc. is facing a probe by the Consumer Financial ProtectionBureau (CFPB) over a loan program that mimics a structure used byhigh-interest lenders to evade state rules before the practice wasstamped out by regulators.
The program, called Bill Me Later, is a service of the onlinemarketplace's PayPal unit that relies on Salt Lake City, Utah-basedComenity Capital Bank to make loans that are then purchased andmanaged by EBay, according to regulatory filings. Under federallaw, banks can lend in any state without being licensed there orcomplying with local interest rate caps.
So-called payday lenders used similar arrangements to avoidstate rules before regulators and state attorneys general ended thepractice, said Margot Saunders, a lawyer with the National ConsumerLaw Center.
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