Who is Offering Loans at 950%?
Tribal lender to pay $500 million settlement
A class of consumers has asked a Virginia federal judge to approve a $500 million settlement with a Native American tribe (Habematolel Pomo of Upper Lake) in a lawsuit over short-term loans charging interest rates as high as 950%. The rates charged violated state rate caps in states where the consumers reside.
According to Monday’s motion, the settlement includes $450 million in debt cancellation and the creation of a $39 million common fund which will be distributed to class members who previously repaid unlawful amounts on their loans.
As part of the settlement, tribal officials will first eliminate the balance on any outstanding loans, and tribal officials have agreed to cease all collection activity and not sell, transfer, or assign any outstanding loans for collection.
The suit involved four lenders — Golden Valley Lending, Silver Cloud Lending, Majestic Lake Financial, and Mountain Summit Financial — all operated by Habematolel Pomo and all accused of charging usurious interest rates.
In fact, these companies were the subject of a suit brought by the Consumer Financial Protection Bureau (CFPB) in 2017.
At that time, the CFPB noted:
Since at least 2012, Golden…
