Government agency may sue PayPal for lending practices

San Jose, Calif. – The Consumer Financial Protection Bureau may sue PayPal for practices of its PayPal Credit same-day loan provider unit. In a filing with the Securities and Exchange Commission (SEC), PayPal said the lawsuit could occur by June 2015.



The bureau has been investigating PayPal Credit, formerly known as Bill Me Later, since 2013. The investigation includes practices in areas such as online credit products, advertising, loan origination, customer acquisition, servicing, debt collection and complaints handling practices.



Results of the lawsuit could include fines, compensation to customers and/or changes in how PayPal Credit operates. PayPal is currently a unit of EBay Inc. but is expected to spin off as a separate company in the second half of 2015.