On January 22, 2018, Colorado Attorney General Cynthia H. Coffman (“Colorado AG”) announced that her office has settled a lawsuit against two lenders. The Colorado AG alleged that the lenders charged predatory interest rates to Colorado consumers by lending money to consumers who had pending personal injury claims and then requiring those consumers to pay back an increased amount in the event that the injured consumers recovered money in their lawsuits.
The lenders had filed a preemptive suit against the Colorado AG claiming that their transactions with consumers were not loans as defined by Colorado law. However, in a November 16, 2015 decision, the Colorado Supreme Court ruled in favor of the Colorado AG, holding that the transactions were in fact loans covered by Colorado’s Consumer Credit Code and subject to interest rate limits and other consumer protections.
The settlement includes a consent judgment entered by the Denver District Court, which requires the lenders to collectively pay a total of $2,328,511 in recompense and enjoins them from future violations of Colorado’s consumer protection laws.
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