The Missouri Attorney General Office announced that it reached an agreement with eight online payday loan operations that will force them to shut down operations in the state. The lenders operated from a Native American reservation in South Dakota, and sold short-term loans with high, illegal fees in violation of Missouri law. Although Missouri law only allows an origination fee of 10% of the value of the loan, with a maximum fee of $75, the payday lenders here allegedly charged a 50% origination fee, and charged 194% APR. The lenders also allegedly forced customers to agree to have future wages garnished automatically rather than going through the court system as mandated by Missouri law. A judgment was entered against the payday lenders that permanently prohibits the payday lenders from conducting any business in Missouri. The judgment also requires that the payday lenders pay $270,000 in restitution to consumers and $30,000 in penalties to the state, erase any remaining loan balances for consumers in Missouri, and instruct credit reporting agencies to remove information about the impacted customers.
Blog Enforcement Watch March 05, 2015