Minnesota sues Internet money lender

Author:
Publish date:
Updated on

The state of Minnesota has filed a lawsuit against Internet cash lender CashCall, Inc., alleging that it charges illegally high interest rates – as much as 342 percent, the Pioneer Press and Star Tribune report.

The company says the high-interest loans are allowed because CashCall is subject to tribal – not state – law. But state Attorney General Lori Swanson says that is an increasingly common scheme sometimes called "rent-a-tribe," in which nontribal businesses are shielded by a tribal front, the newspapers report.

Investigators say the loans originate with a company called Western Sky Financial, the owner of which is reported to be a member of the South Dakota Cheyenne River Tribe, Swanson says.

State officials on Thursday filed suit in Hennepin County to block the California-based CashCall from conducting business in Minnesota, and they are seeking to get money back for people who have borrowed money from the lender at sky-high rates.

"This outfit has a history of hiding behind front companies to circumvent the legal protections – including limits on interest rates – available to borrowers under state law. The Internet is flooded with unlicensed lenders, and people need to be on guard,” Swanson said in a press release.

"Minnesota is not open for illegal and sham lending businesses that prey on our consumers," Commerce Commissioner Mike Rothman added in the release.

Next Up

Related