Nebraska Attorney General Doug Peterson and Director of the Department of Banking and Finance Mark Quandahl announce today that they have reached a settlement that requires unlicensed internet loan companies to pay restitution, forgive current debts, notify credit reporting agencies for credit history repair, and discontinue lending in Nebraska.
In the State’s action against CashCall, Inc., Delbert Services Corporation, WS Funding, LLC, and their owner J. Paul Reddam, and Western Sky Financial, LLC, and its owner Martin A. Webb, the State alleged that Western Sky Financial, LLC worked with CashCall, Inc. as an unlicensed lender, making usurious internet loans to over 2,400 Nebraskans with annual percentage rates ranging from 89 to 342% and charging unlawful origination and other fees.
“Nebraskans need to be protected from unscrupulous lending practices,” said Attorney General Peterson. “This settlement will provide relief for many of our hard-working citizens who were taken advantage of by a predatory online lender.”
Director Quandahl stated “We are proud of this outcome that will help the Department of Banking and Finance fulfill its mission of protecting and maintaining the public confidence in the state regulated financial service industries.
Under the terms of the settlement, the companies and their owners shall establish a $950,000 restitution fund to repay, pro rata, excess interest and fees paid by Nebraska consumers and pay $150,000 to the State. Further, $557,066 in loans taken out by Nebraska consumers and currently held by one of the named companies will be forgiven, credit reporting agencies will be notified to remove all history of these loans, and the companies and their owners are prohibited from lending in Nebraska until they comply with the law.
Restitution will be managed by a third party fund administrator who will contact eligible Nebraska consumers on behalf of the State. In addition, a website will be established in the near future to provide consumer information and to allow eligible consumers to file a claim for restitution. For more information, affected consumers can visit the Nebraska Attorney General’s Consumer Protection website at protectthegoodlife.nebraska.gov or call (800) 727-6432.