Banking and Securities Department Announces Consent Agreement for Unlicensed Lending to Pennsylvanians
HARRISBURG, Pa., July 17, 2014 /PRNewswire-USNewswire/ -- The Department of Banking and Securities today announced a consent agreement and order with CashCall, Inc., WS Funding, LLC, Delbert Services Corporation and J. Paul Reddam for violations of Pennsylvania's consumer lending statutes in connection with unlicensed loans they made over the Internet to Pennsylvania residents.
The companies made loans to consumers at interest rates that exceeded those allowed by Pennsylvania laws that govern consumer lending: the Consumer Discount Company Act and the Loan Interest and Protection Law. In addition, the companies were not licensed to make loans to Pennsylvania consumers, as required by these laws. The department received more than 100 complaints from consumers against the companies.
Under the terms of the consent agreement and order, the companies will:
- Cease and desist from advertising, soliciting or making loans to Pennsylvania residents until properly licensed;
- Not be eligible to be licensed to make loans to Pennsylvania consumers for three years;
- Permanently modify the interest rates to 6 percent annual interest on outstanding loans initiated with Western Sky Financial, LLC, and currently serviced by CashCall, Inc. or one of its affiliates;
- Request to credit reporting agencies the removal of all reports made by CashCall and its affiliates in regard to Pennsylvania consumers; and
- Pay the department $1 million, which will be used to provide restitution to Pennsylvanians who paid in excess of the allowed 6 percent annual interest rate on loans with the companies, as well as to recoup investigation and litigation costs.
"The vast majority of financial services companies licensed to do business in Pennsylvania do a good job of ensuring that their customers are treated fairly," said Secretary of Banking and Securities Glenn E. Moyer. "However, we will not tolerate 'bad actors' who disregard Pennsylvania's consumer lending laws."
Pennsylvania consumers who have questions about the agreement can call the Department of Banking and Securities toll-free at 1-800-PA-BANKS (800-722-2657).
Media contact: Ed Novak, 717-783-4721
SOURCE Pennsylvania Department of Banking and Securities