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A group of Virginia consumers say that certain lenders are using Native American tribes to shield them from regulations in a recently filed payday loan rates class action lawsuit.
According to lead plaintiffs, George Hengle, Sherry Blackburn, Willie Rose, Elwood Bumbray, Tiffani Myers, Steven Pike, Sue Collins, and Lawrence Mwethuku, lenders are using a “tribal lending model” to offer high interest rates to mainly low-income consumers.
These types of loans are often called “payday loans,” and the plaintiffs say that the companies offering these loans are out of compliance with state usury and licensing laws. However, the companies claim that since they are “owned” by a Native American tribe, they are not subject to state law.
The plaintiffs say they were duped into taking out loans subject to huge interest rates, between 543 to 919 percent. The payday loan companies operate online, and the plaintiffs say they did not know that the loans would not be subject to Virginia law that limits interest rates to 12 percent.
“Under this model, payday lenders originate their loan products through a company ‘owned’ by a Native American tribe and organized under its laws,” alleges the class action lawsuit. “The tribal company serves as a conduit for the loans, facilitating a dubious and legally incorrect claim that the loans are subject to tribal law, not the protections created by state usury and licensing laws.”
“In exchange for the use of its name on the loan, the tribal company receives a small portion of the revenue and does not meaningfully participate in the day-to-day operations of the business.”
The companies accused of making the payday loans include Golden Valley Lending Inc., Silver Cloud Financial Inc., Mountain Summit Financial Inc., and Majestic Lake Financial Inc.
According to the payday loan class action lawsuit, the companies all appear to be operated by National Performance Agency, along with other companies owned by Scott Asner and Joshua Landy. Asner and Landy allegedly formed the companies under the laws of the Habematolel Pomo of Upper Lake, a Native American tribe located in California.
According to the VA payday loan rates class action lawsuit, tribal ownership of the payday loan companies is a sham conducted to shield the non-tribal individuals’ illegal actions.
The payday loan operation was sold to the tribe in 2014, but the majority of the work occurs thousands of miles away from the Tribe’s lands, contend the plaintiffs.
This VA payday loan rates class action lawsuit is not the first to be filed by the states’ residents. A local state newspaper reports that other class actions have popped up over payday loan practices in Virginia.
“We are simply trying to force the lenders to follow our laws,” the executive director of the Virginia Poverty Law Center that assisted with some of the lawsuits told The Virginian-Pilot. “These lenders try to escape accountability for their unlawful loan sharking by claiming immunity from our law because of their phony connection to American Indian tribes. The reality is that the American Indian tribes have no part in the business except for show and the tribes get only 2 percent of the profits. By ignoring our laws, the lenders create an inequitable and unfair marketplace that hurts borrowers and legitimate lenders.”
The plaintiffs are represented by Kristi C. Kelly, Andrew J. Guzzo, and Casey S. Nash of Kelly Guzzo PLC, Leonard A. Bennett, Craig C. Marchiando, and Elizabeth W. Hanes of Consumer Litigation Associates PC, and James W. Speer of the Virginia Poverty Law Center.
The VA Payday Loan Rates Class Action Lawsuit is Hengle, et al. v. Asner, et al., Case No. 3:19-cv-00250-REP, in the U.S. District Court for the Eastern District of Virginia.
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37 thoughts onPayday Loan Lenders Charge 900% Interest, Class Action Claims
please add me
please add ne
PLEASE ADD ME…..SCANDALOUS
Please add me
Please add me too-they are harrassing and ripoff artists.
Biggest scam out there, they couldn’t (or for self serving reasons ) get the automatic payment from my bank to work even though we confirmed on an hour long call that it was working. No notifications, phone calls or emails saying that the process wasn’t working. Email 3 months in with what was 1200 loan I now owe 3000. After threatening lawsuit the gave me a 1 time option to payoff for 1900.
Calculating\Scam\ preying on people. I hope for common decency this company and its executives are held accountable
Add me .
Please add me. I needed some quick cash, they sent me $1000. Nowhere we’re the rates published on the website not mr would the agent online give me the rates. It will cost me $4100 if I pay their schedule which by the way, lowers the payment every pay period to stretch out the fees! I was under the impression there would be a one time $300 finance charge taken at the beginning. It’s a total sham!
Please add me to this this class action. I have two different Native American payday loans and both are thieves .
Please add me to this class action lawsuit please. My name is Louis Flores and ruin me . This became a nightmare. My email is l.flores.59@hotmail.com
Please add me