Update: State regulators reach million dollar settlement with internet lender

Update 4/10/17 - Wanda Jones said she couldn't believe what she was hearing.

She said she had already paid online lender, CashCall, $1,800 on an $800 loan and they were wanting another $2,300.

“I almost fainted,” she said. “I'm not going to pay it, but they would call me constantly, 4 or 5 times a week. We're going to sue.”

Here’s the thing.

Wanda didn't get her loan through CashCall.

She borrowed the money from tribal lender, Western Sky Financial.

“They told me they had purchased my account from Western Sky and I would be making payments to them instead,” she said.

Rubin Tornini and the Oklahoma Department of Consumer Credit is alleging CashCall exploited the tribal lender and borrowers, like Wanda.

Remember, CashCall is regulated by the state and can't charge excessive interest rates, but tribal lenders, like Western Sky, can.

It is alleged CashCall let Western Sky create Wanda's loan then purchased it from them in order to cash in on the excessive interest rates.

“There lies the little piece that allowed us to say, ‘No, you may not collect on a loan that was illegally made in excess of allowable charges,” Tornini said.

Here's what the settlement means for borrowers, like Wanda.

CashCall will forgive their debt and pay them relief or a refund and remove any negative information from their credit reports.

Unfortunately, for Wanda, the damage has already been done.

She said CashCall helped ruin her credit forcing her to file bankruptcy.

Right now, the state has the settlement money in an account and will start distributing the funds once it's able to verify information.

That could take a little while.

The Department of Consumer Credit is asking anyone who had a loan with CashCall or Western Sky to contact their office.

The Department of Consumer Credit wants to hear from anyone who took out a loan with Western Sky or made payments to CashCall.

The In Your Corner bottom line:

  • Avoid online pay-day or short-term loans.
  • Make sure the lender is licensed with the state.
  • Check a lender's licence here.

OKLAHOMA CITY - The Oklahoma Department of Consumer Credit said online lender CashCall exploited Oklahoma consumers.

“This is the classic rent-a-tribe,” said the Oklahoma Department of Consumer Credit’s deputy administrator, Ruben Tornini.

The state charges CashCall with servicing and collecting large sums of cash on illegally made loans.

“Their original argument [is] because they didn't make the loan with excessive charges, that's not their deal,” Tornini said.

Tribal lender Western Sky Financial created the loans.

Remember, the state has no jurisdiction over tribal lending, so tribes can charge customers excessive interest rates and get away with it!

Non-tribal lenders like CashCall though are licensed by the state and must follow a different set of rules. 

Tornini said CashCall was exploiting the tribe to get around state law.

“The benefit to a legitimate company just collecting is being able to say ‘Hold up a second. We didn't make that loan [and] if it's excessive, that's not our problem,’” Tornini said. "That's where we've come in and said, ‘No, you can't collect that loan because the charges are excessive.’”

CashCall is barred from doing business in Oklahoma.

It must pay a million dollars in relief to about $6,500 borrowers in our state, plus forgive all debt and remove any negative information from credit reports.

The In Your Corner bottom line:

  • Avoid online pay day or short-term loans.
  • Make sure the lender is licensed with the state.
  • Check a lender's licence here.

The Department of Consumer Credit wants to hear from anyone who took out a loan with Western Sky or made payments to CashCall.

“We found that phone numbers change, addresses change,” Tornini said. “You can imagine we're going to send out all of this certified mail [and] it's going to come back non-deliverable."