Indian-owned Payday Lender Agrees to $1.5M Fine, Refunds to NY Consumers
An Indian-owned payday lender has agreed to pay a $1.5 million to settle a lawsuit with the State of New York, and additionally to refund interest payments to consumers in the state, reported The Wall Street Journal.
Western Sky Financial LLC is owned and operated by an individual member of the Cheyenne River Sioux Tribe of South Dakota, with no ties to the tribe and run from the "exterior boundaries" of the Cheyenne River Sioux Reservation.
Last year New York Attorney General Eric Schneiderman accused Western Sky and its affiliates CashCall Inc. and WS Funding LLC, of charging triple-digit interest rates, which violates lending laws in New York State.
After the state sued the companies, Timber Lake, South Dakota-based Western Sky ceased taking loan applications and suspended all operations on September 3, 2013. "As a result, 94 people in the impoverished Eagle Butte community have lost their jobs, undermining the economic security of their families and this entire community," a company press release stated.
“I’m deeply saddened that so many members of the Cheyenne River Sioux tribe have had their lives turned upside down because of regulators and bureaucrats thousands of miles away,” said Martin "Butch" Webb, founder of Western Sky Financial. “Creating jobs here on the Cheyenne River Indian Reservation has been my proudest accomplishment, and its painful to know that my former employees face the prospect of long-term unemployment given the few job opportunities available to them.”
Attorney General Schneiderman released the following statement:
"With this agreement, thousands of New Yorkers exploited by Western Sky and CashCall will get the relief they are owed. As individuals in New York and across the country continue to face tough economic times, we must keep up the fight against those who exploit and scam them. Illegal collectors and lenders, in particular, must pay a price for their behavior and pay back the New Yorkers they harmed.”
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