Online lenders to repay $16.9 million and stop high-interest loans to settle Virginia lawsuits – The Virginian-Pilot
Virginians burned by triple-digit interest rates from lenders pretending to be Indian tribes have secured promises that the companies will cancel their debts and repay $16.9 million to tens of thousands of borrowers across the country.
The settlement comes with a $39.7 million settlement in connection with the Texas bankruptcy of the finance company that handled these and other lending operations. This case, unusually, brought two borrowers who had been stuck with high-interest loans — including one from Virginia — to the five-person creditors’ committee to resolve the case.
The Virginia settlement involves loans that charged interest rates as high as 448% on loans ranging from $300 to $3,000. A borrower paid $15,399 for his debt before filing a lawsuit.
It reaches more than 40,000 borrowers who have sought cash quickly through online loans.
As part of the Virginia settlement, Plain Green LLC, which claimed to be from the Chippewa Cree Tribe of the Rock Boy Reservation in Montana; Great Plains Lending, associated with the Otoe-Missouria Tribe of Oklahoma; and MobiLoans LLC, associated with the Tunica Biloxi Tribe of Louisiana, have agreed to stop making loans at interest rates above the limits set by the borrowers’ home state.
The three also agreed to reimburse borrowers for the difference between what the companies collected and state rate caps — in Virginia’s case, the 12% cap set by its usury law.
They admitted no wrongdoing.
The three claimed to be exempt from state usury laws because they were tribal entities, although the now bankrupt Texas-based Think Finance company actually made the loans, collected the payments, generated leads for new customers and financed the entire operation. The tribes received a 4.5% fee, according to court records.
Lawyers from Consumer Litigation Associates, based in Newport News, and Kelly Guzzo Law Firm in Fairfax filed the lawsuits in Virginia and pursued the borrowers’ claims in Think Finance’s Texas bankruptcy case.
The Virginia General Assembly has for several years defeated loophole bills that online lenders use to circumvent state laws that cap most interest rates.
Dave Ress, 757-247-4535, [email protected]