Consumers Reach $500M Settlement with Tribal Lenders Charging 950% Interest | Attorney Andy

Four lenders operated by a single tribe are being forced to foreclose on loans and pay penalties

A class of consumers has asked a federal judge in Virginia to approve a $500 million settlement with a Native American tribe (Habematolel Pomo of Upper Lake) in a short-term loan lawsuit with interest rates as high as 950%. The calculated tariffs violated state tariff caps in states where consumers reside.

According to Monday’s filing, the settlement includes $450 million in debt relief and the creation of a $39 million common fund to be distributed to class members who previously repaid unlawful amounts on their loans.

As part of the settlement, tribal officials will first pay off the balance of all outstanding loans, and tribal officials have agreed to cease all collection activities and not to sell, transfer, or assign any outstanding loans for collection.

The lawsuit involved four lenders — Golden Valley Lending, Silver Cloud Lending, Majestic Lake Financial and Mountain Summit Financial — all operated by Habematolel Pomo and accused of charging usurious interest rates.

In fact, these companies were the subject of a lawsuit by the Consumer Financial Protection Bureau (CFPB) in 2017.

At the time, the CFPB stated:

Since at least 2012, Golden Valley Lending and Silver Cloud Financial have been offering online loans ranging from $300 to $1,200 with annual interest rates ranging from 440 to 950 percent. Mountain Summit Financial and Majestic Lake Financial recently began offering similar loans.

At the time of this lawsuit, then-Director of the CFPB Richard Cordray said:

“We are suing four online lenders for collecting debt that consumers are not legally owed,” he said CFPB Director Richard Cordray. “We allege that these companies made fraudulent claims and illegally took money from people’s bank accounts. We are trying to stop these violations and exonerate consumers.”

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