Western Sky Financial, CashCall Loans Settlement

A settlement has been reached over allegations unlicensed loans were made to approximately 17,500 Michigan consumers bearing illegally high interest rates. If you had a loan with Western Sky Financial LLC and/or CashCall Inc., you may be eligible for benefits from the settlement.

Michigan Attorney General Bill Schuette’s Corporate Oversight Division and Michigan Department of Insurance and Financial Services (DIFS) Director Ann Flood have reached a $2.2 million settlement with Western Sky Financial and CashCall.

According to the lawsuit, Western Sky assigned the loans it made to Michigan consumers to CashCall, which serviced and collected the loans directly or through its affiliates. The interest rates Western Sky charged on its internet-based loans allegedly ranged between 89 percent and 169 percent, far above the 7 percent interest rate permitted for unlicensed lenders and the 25 percent interest rate permitted for licensed lenders.

Western Sky also allegedly charged loan processing fees of as much as $500, exceeding the $300 cap allowed for licensed lenders. In July 2013, DIFS commenced a cease and desist action against Western Sky under the Regulatory Loan Act, seeking to stop the company from making unlicensed and high-interest loans to Michigan consumers. The parties engaged in intensive negotiations, which eventually resulted in this settlement.

“We will not tolerate any businesses attempting to skirt the rules at the expense of Michigan consumers trying to make ends meet,” Schuette said. “This settlement is a victory for the thousands of Michigan consumers who took out Western Sky loans and serves as a warning to only do business with licensed entities. I am grateful for the joint efforts and hard work by the Department of Insurance and Financial Services and my staff that secured this settlement providing significant relief for Michigan consumers.”

Who’s Eligible

If you took out a Western Sky loan while you were a Michigan resident, you may be entitled to benefits from the Western Sky settlement. You should receive a notice in the mail by July 20, 2015 informing you about your rights. If you do not receive a notice of the Western Sky settlement by July 20, 2015, contact the Claims Administrator at 1-866-336-5756.

Potential Award

The Western Sky settlement provides significant relief to eligible Michigan consumers. Under the terms of the settlement, CashCall, Western Sky and their subsidiaries agree to provide the following benefits, regardless of whether eligible claimants file Claim Forms:

• Cease and desist from making loans of any kind to Michigan residents, unless the loans are fully compliant with Michigan law;
• Cease and desist from making negative credit reports to credit bureaus, and to request the removal of all pre-existing credit reports made by Western Sky, CashCall, or their subsidiaries with respect to loans made to Michigan residents;
• Permanently reduce the interest rate on all Western Sky loans to 7 percent annually on the loan’s then-outstanding balance of principal;
• Permanently cease and desist from selling or assigning Western Sky loans made to Michigan residents to any unaffiliated third-party, and provide information to DIFS and the Attorney General about any companies to which these loans have already been assigned.

Consumers who file valid claims by Sept. 18, 2015 may also be entitled to the following benefits:

• A pro rata portion of the $2.2 settlement fund. This benefit applies to all Michigan consumer with Western Sky loans, and who have repaid to Western Sky or CashCall more than their loan proceeds plus 7 percent annually. In addition, consumers who meet these criteria will have their loan recorded as paid-in-full, if the loan is still owned by Western Sky or CashCall.
• For Michigan consumers who have repaid less on their Western Sky loan than the loan proceeds plus 7 percent annually, Western Sky and CashCall will: (a) adjust the loan balance to the difference between the loan proceeds minus all payments made; and (b) permanently reduce the interest rate on this adjusted balance going forward to 7 percent annually, if the loan is still owned by Western Sky or CashCall.

Proof of Purchase

N/A

Claim Form

Claim Form Deadline

9/18/2015. NOTE: If you do not receive a notice of the Western Sky settlement by July 20, 2015, and you believe you are eligible for benefits from the settlement, contact the Claims Administrator at 1-866-336-5756.

Case Name

In the Matter of: Department of Insurance and Financial Services v. Western Sky Financial LLC, et al., DIFS Enforcement Case No. 12-11579, in the State of Michigan Department of Insurance and Financial Services

Final Hearing

N/A

Settlement Website

www.MIWesternSkySettlement.com

Claims Administrator

Dahl Administration LLC

1-866-336-5756

Class Counsel

N/A

Defense Counsel

N/A