CashCall, other online lenders settle N.Y. lawsuit
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NEW YORK -- New York borrowers stand to get more than $35 million in debt relief under an agreement between the state’s attorney general and an Anaheim-based online lender.
New York Atty. Gen. Eric Schneiderman said Friday his office had settled a lawsuit accusing CashCall Inc. of illegally charging borrowers triple-digit interest rates, then hounding them once they inevitably fell behind. The suit was filed in August.
Under the settlement, CashCall -- along with Western Sky Financial, WS Funding and their owners -- will pay $1.5 million in penalties.
They also agreed to modify all outstanding loans to New York borrowers, stop collection actions against borrowers in the state who have paid back the principal of their loans, and cease collections of interest from New York consumers.
“With this agreement, thousands of New Yorkers exploited by Western Sky and CashCall will get the relief they are owed,” Schneiderman in a statement. “As individuals in New York and across the country continue to face tough economic times, we must keep up the fight against those who exploit and scam them. Illegal collectors and lenders, in particular, must pay a price for their behavior and pay back the New Yorkers they harmed.”
CashCall charged as much as 355% in interest, far exceeding New York’s civil and criminal usury limits of 16% and 25%, Schneiderman said.
The settlement must get court approval.
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