On May 5, 2016, Nebraska Attorney General (“AG”) Doug Peterson and the Department of Banking and Finance announced a settlement with unlicensed online lenders that allegedly engaged in unfair and deceptive lending practices through a tribal lending scheme.
The Nebraska AG brought an action on May 4, 2016 against several online lending companies claiming that they were making usurious personal loans with excessive interest rates and other unlawful origination fees in violation of Nebraska state lending laws. The companies allegedly made these “usurious loans,” with interest rates ranging from 89 to 342%, to more than 2,400 customers.
The settlement requires the companies to: (1) create a restitution fund of $950,000 to repay the overpaid interest and fees; (2) pay $150,000 to the state in enforcement costs; (3) forgive the currently held loan debts of Nebraska consumers; (4) notify credit reporting agencies to help repair consumers’ credit history; and (5) cease lending practices in Nebraska until in compliance with state law.
This is not the only action in which these companies have been involved concerning their lending practices. Enforcement Watch has reported on these similar state actions here, here, and here.