payday lender booking to pay restitution to Missourians | Local company
A payday loan transaction based on a Sioux reservation in South Dakota will pay off Missouri borrowers $ 270,000 and cease doing business in Missouri, under a deal announced Thursday.
Its Missouri borrowers will also have their remaining debts canceled.
Missouri Attorney General Chis Koster said up to 6,300 Missourians, including 784 in the St. Louis area, may have paid excessive loan fees.
The operation had claimed to be exempt from all state laws because it operated out of a “sovereign” nation, the Cheyenne River Sioux tribe. She lent money over the Internet and did not have an office in Missouri.
Koster said the lenders were controlled by Martin A. “Butch” Webb and loaned under the names of Payday Financial, Western Sky Financial, Lakota Cash, Great Sky Finance, Red Stone Financial, Big Sky Cash and Financial Solutions.
Koster went on to say that lenders violated state laws by charging gigantic fees on short-term loans. These laws prohibit origination fees of more than 10 percent of the loan, up to a maximum of $ 75.
A borrower paid a $ 500 origination fee on a $ 1,000 loan, which was added to the loan amount. She was also charged 194% interest and eventually paid over $ 4,000, the attorney general’s office reported.