PA AG settles down with a collector on a payday loan program
On April 9, the Pennsylvania Attorney General ad settlements with the former CEO of a since-dissolved lender and a debt collector to resolve claims that the collector was charging borrowers interest rates as high as 448% on loans and lines of credit. The AG alleged that the former CEO “participated in, directed and controlled” business activities related to the allegedly illegal online payday loan system, while the debt collector raised more than $ 4 million related to the payments. Pennsylvania consumer loan accounts. The terms of the regulation require the individual defendant to comply with relevant consumer protection laws and limit the ability of the individual defendant to work in the consumer loan industry in Pennsylvania for the next nine years. In addition, the individual defendant is required to pay $ 3 million to the Commonwealth.
The AG’s office noted that the United States District Court for the Eastern District of Pennsylvania also approved a regulation with the debt collector, which obliges the company to comply with the relevant consumer protection laws and, among others, to undertake the following actions: (i) ensure that all receivables acquired, for which it attempts to collect, comply with applicable laws and regulations; (ii) cancel all applicable account balances, take no further action to collect debts allegedly owed by Pennsylvania consumers on such accounts, and notify consumers of cancellations; (iii) “to refrain from engaging in [c]ollections on everything [d]loan withdrawals made on the Internet by [n]bank lenders who violate Pennsylvania ‘laws, including its usury laws; and (iv) will not sell, resell or assign debt related to applicable accounts, including accounts subject to a previously negotiated nationwide class action settlement agreement and bankruptcy plan under from Chapter 11. Previous InfoBytes coverage relating to the payday loan system can be found here, here, and here.