“Yes the money is expensive”. Officials say too expensive.
The Washington State Department of Financial Institutions announced they have filed charges against five unlicensed on-line lenders owned and operated by Martin Webb including Western Sky Financial, Big Sky Cash and Lakota Cash, and others.
These unlicensed lenders, located on the Cheyenne River Sioux Tribe Indian Reservation in South Dakota, are owned and operated by Webb as a tribal member rather than by the tribe. These lenders have made thousands of loans to Washington residents online at rates that would be illegal even if they held licenses from DFI as the maximum rate of interest allowed is 12 percent. The maximum rate of interest allowed for licensees under the Consumer Loan Act is 25 percent. The interest rates actually being charged by these companies included rates upwards of 89.68 percent to 1,825 percent.
After receiving over 20 complaints against the companies, DFI issued a consumer alert warning consumers that Western Sky Financial and Lakota Cash were not licensed to make loans in Washington.
“These companies are preying on financially struggling Washington consumers with loans at unconscionable repayment terms,” DFI Director of Consumer Services Deborah Bortner explained. “For example, when a borrower takes out a $2,600 loan from Western Sky and follows the proposed repayment schedule, it takes that borrower four years to repay the loan and costs $14,000 in interest. That is just not right. It is no wonder that complaints from our consumers continue to roll in.”
Recently, at least four other states, including Colorado, Maryland, Missouri and Florida, have taken legal action against these entities for making loans without a license and rates of interest violating the various state interest rate limits, and the Federal Trade Commission has taken legal action against these entities alleging illegal collection practices.