For years, online lenders have claimed affiliations with tribal groups in order to skirt state laws related to short-term, high-interest loans. Today, the state of Minnesota came to a settlement over a years-long, so-called “rent-a-tribe” loan scheme with CashCall, ordering the lender to pay $11.6 million in relief to borrowers. [More]
Collecting a debt from people who owe money is one thing. Collecting a debt from people who don’t legally owe because those loans should never have been written in the first place? That’s another problem altogether, and the Consumer Financial Protection Bureau is very upset with one company .
Kay and Lewis Brown wanted some quick cash so they could make a moderate addition to their home. They turned to CashCall, an online loan service, after seeing the ads on TV. The company lent them $5,000 — at 59% interest. Now the couple is on the hook for $20,830.