66 East Main Street, 3rd Floor Little Falls, NJ 07424

Predatory Loans – NY Court First to Crack Down on Online Lenders

Share on facebook
Share on linkedin

Predatory Loans: a/k/a Payday Loans / CashCall Short-Term Loans

Online lender Western Sky Financial LLC has agreed to pay a $1.5 million fine and refund interest payments to borrowers under an agreement reached with New York Attorney General Eric Schneiderman, the Wall Street Journal reported today. Schneiderman had accused the Timber Lake, S.D.-based firm, along with affiliates CashCall Inc. and WS Funding LLC, of charging triple-digit interest rates, a violation of New York’s lending laws. The settlement, which comes amid a multistate crackdown on “payday” lenders offering short-term, high-rate loans over the Internet, requires the firms to stop collecting interest on loans to residents and refund to borrowers any interest above the 16 percent state limit, which could result in as much as $35 million in relief for New York consumers, a spokesman for Schneiderman’s office said yesterday.