FEDERAL WAY, Wash. (11/14/12)--Five states have filed a statement of charges against five unlicensed online lenders.
Washington is the latest state to file the charges against the five lenders, all owned by Martin Webb. Colorado, Maryland, Missouri and Florida have also taken legal action against the same entities for making loans without a license and for offering rates of interest that violate the various state interest rate limits, according to the Northwest Credit Union Association said (The Anthem
The Federal Trade Commission (FTC) has taken legal action against the entities as well, alleging illegal collection practices, said the league.
The five lenders are:
- Western Sky Financial LLC;
- Payday Financial LLC, d/b/a Big Sky Cash and Lakota Cash;
- Great Sky Finance LLC, d/b/a Great Sky Cash;
- Green Billow LLC, d/b/a Four Seasons Cash; and
- Red Stone Financial LLC, d/b/a Red Stone Cash.
The unlicensed lenders have made thousands of loans to Washington state residents online at rates between 89.68% and 1,825%--rates that would be illegal even if the entities held licenses from the state Department of Financial Institutions (DFI).
The maximum rate of interest allowed under RCW 19.52, the state of Washington's usury statute, is 12%. The maximum rate of interest allowed for licensees under the Consumer Loan Act is 25%.
The unlicensed lenders, located on the Cheyenne River Sioux Tribe Indian Reservation in South Dakota, are owned and operated by Martin Webb as an individual tribal member rather than by the Cheyenne River Sioux Tribe or any of its political subdivisions, said the association.
After receiving at least 22 complaints against the entities from state residents, Washington's DFI issued a consumer alert in August 2011 warning consumers that Western Sky Financial and Lakota Cash were not licensed to make loans in Washington.
The Consumer Loan Act authorizes the DFI director to file charges against companies and individuals believed to have violated the act. The charges are not a conclusive finding or order that violations of the act have occurred. The named lenders have the right to request an administrative hearing on the charges, said the association.