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“Western Sky Financial, a South-Dakota-based online lender that’s become infamous for its sky-high interest rates, is finally being sued.
New York State Attorney General Eric T. Schneiderman announced Tuesday that his office has filed a lawsuit against Western Sky for charging rates that far exceed what is permissible under New York law. According to the Schneiderman lenders not licensed by the state of New York can’t charge an annual interest rate greater than 16 percent. Western Sky charges interest rates as high as 355 percent.”
– Daily Finance, Western Sky Financial Sued for Charging Interest Rates as High as 355%.
“Western Sky Financial, a prominent online lender that offers short-term loans at triple-digit interest rates, said it will stop funding loans on Sept. 3 amid mounting legal battles with authorities in several states, including Maryland.
The decision arrives as state and federal regulators are clamping down on payday lending, a burgeoning industry that operates under a patchwork of laws. These loans carry high interest rates and balloon payments that can trap Americans in a cycle of debt, critics say. Industry groups say payday lenders are being persecuted and argue that they serve a need that is not being met by traditional banks.
Officials at Western Sky did not respond to requests for comment, but the firm explicitly said on its Web site that it will no longer provide loans as of September.
Western Sky has been the subject of several lawsuits challenging its lending in states with strict usury laws that cap interest rates on loans. The company is owned by a Cheyenne River Sioux tribal member and operates on the tribe’s South Dakota reservation. It claims that the tribe’s sovereign immunity makes the company exempt from following state law.
This month, New York state’s attorney general, Eric Schneiderman, sued the company, alleging that it violated state licensing and usury laws that cap interest rates on loans at 25 percent.”
– The Washington Post, Payday lender Western Sky Financial to stop funding loans on Sept. 3.
“The company, Western Sky Financial LLC, claims ties to the Cheyenne River Sioux Tribe in South Dakota and immunity from state and federal law.
Schneiderman, in a lawsuit filed in New York State court in Manhattan, accused the company of charging interest rates of as much as 355 percent to New Yorkers who took out personal lonas.”
– Huffington Post, New York AG Eric Schneiderman Sues Western Sky Financial For Allegedly Scamming Customers.
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Indian Country 52
Indian Country 52 is a weekly project by David Bernie that uses the medium of posters that promote issues and stories in Indian Country.
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