On October 29, the Massachusetts Attorney General’s office announced that it had reached a consent order with installment loan lenders, their affiliated companies, and owners, over allegations that the lenders engaged in unfair or deceptive practices in connection with the making, purchasing, servicing, or collecting of high-interest consumer installment loans. The complaint alleged that the lenders originated usurious loans in violation of the Massachusetts Criminal Usury Law and failed to register as third-party loan servicers with the Massachusetts Division of Banks in violation of the Massachusetts Small Loans Law. The complaint further alleged that the lenders engaged in unfair or deceptive practices in violation of the Massachusetts Consumer Protection Law by originating and collecting loans without a license, failing to evaluate borrowers’ ability to repay loans, charging illegal fees and interest rates, and misrepresenting to borrowers that their loan interest rates were legal. The consent order prohibits the lenders from engaging in business in Massachusetts, requires the lenders to deem as “paid in full” certain loans originated by eligible borrowers, and obligates the lenders to recalculate interest rates charged on other loans. The consent order also requires the lenders to pay $388,231 in civil penalties and $65,000 in attorneys’ fees to the Commonwealth of Massachusetts.
Blog Enforcement Watch October 30, 2015