On August 18, 2020, the Colorado Attorney General (Colorado AG) announced a settlement with two bank and two non-bank lenders for allegedly exceeding state interest rate limits on consumer loans. The case resolves two cases that were originally filed in Denver District Court and have been pending since 2017.
The Colorado AG alleged that the non-bank lenders illegally partnered with the out-of-state banks in a scheme to take advantage of federal laws allowing certain out-of-state banks to lend at interest rates that exceed Colorado limits.
Under the settlement, the banks and their non-bank partners will be required to ensure that they are making true bank loans; cease lending to Colorado consumers at rates above 36%; pay $1,050,000 to the State of Colorado for consumer protection efforts; and make a $500,000 contribution to the MoneyWi$er program to support K-12 financial education in Colorado. The non-bank parties have also agreed to maintain a Colorado lending license.
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