HARRISBURG – Attorney General Josh Shapiro today announced a settlement with Think Finance, a national online payday lender, and an associated private company …
HARRISBURG – Attorney General Josh Shapiro today announced a regulation with Think Finance, a national online payday lender and associated private equity firm for allegedly designing an illegal $ 133 million online payday loan program that targeted up to 80,000 Pennsylvania consumers.
The settlement will write off any remaining balances on illegal loans, according to Shapiro’s announcement. Pennsylvania is one of the major creditors to have negotiated this comprehensive settlement with Think Finance as part of its bankruptcy plan, which is awaiting approval by the Bankruptcy Court and subsequently the US Eastern District Court of Pennsylvania. .
In late 2014, the Pennsylvania attorney general’s office sued Think Finance, Inc. and Chicago-based private equity firm Victory Park Capital Advisors, LLC, and various affiliated entities. The lawsuit alleged that between 2011 and 2014, three websites operated by Think Finance – Plain Green Loans, Great Plains Lending and Mobiloans – allowed borrowers to take out loans and lines of credit while charging effective interest rates. up to 448%.
Payday loans, which typically charge interest rates above 200% or 300%, are illegal in Pennsylvania.
The lawsuit also alleged that the websites attempted to protect themselves from state and federal laws by operating under the guise of Native American tribes and the First Bank of Delaware, a federally chartered bank, with a loan product called “ThinkCash.”
Shapiro alleged that these actions violated several Pennsylvania laws, including the Pennsylvania Unfair Trade and Consumer Protection Act, the Pennsylvania Corrupt Organizations Act, the Uniformity of Extension Act. of Pennsylvania Credit and the Federal Consumer Financial Protection Act of 2010. Victory Park Capital was sued under the Corrupt Organizations Act only.
“It’s a model of how aggressive state enforcement can lend itself to nationwide relief for consumers,” Shapiro said. “The settlement will bring relief to approximately 80,000 Pennsylvanians who fell victim to the $ 133 million payday loan program devised by Think Finance and its affiliates, as well as consumers across the country who have also been affected. Our Bureau of Consumer Protection will hold accountable anyone who attempts to exploit Pennsylvania consumers by charging illegal interest rates. “
In addition to canceling any remaining balances on illegal loans, the settlement will allow borrowers who have repaid more than the loan principal and the 6% legal interest rate to proportionally share a multi-million dollar fund created by the rule. Consumers will receive a check in the mail and will not have to do anything to claim their refund. The defendants will also request that the credit bureaus remove all credit reports on the loans.
Consumers will receive notices if they qualify for relief. Affected consumers can obtain more information about the regulation, including whether they are entitled to relief, by visiting www.PAThinkFinanceSettlement.com or by calling 1-877-641-8838.
Under the settlement, refund checks will be mailed to consumers at the addresses listed on their loan agreements. All borrowers who have moved since taking out these loans should notify the settlement administrator of their new address at the above phone number.
The Pennsylvania lawsuit spurred private litigation in other states and by the Consumer Financial Protection Bureau, and precipitated national settlement. Shapiro will continue his litigation against former Think Finance CEO Kenneth Rees and his debt collection firm, National Credit Adjusters. A trial involving these defendants could take place as early as next year.
Anyone who believes they have been the victim of an abusive loan or related debt collection practices can file a complaint with procureurgeneral.gov/submit-a-complaint/ or contact the Bureau de la protection du consommateur by dialing 1-800-441-2555 or by sending an firstname.lastname@example.org.
Source: Office of Attorney General Josh Shapiro