Oregon Regulator Issues Final Cease-and-Desist Order Against Western Sky Financial
April 25, 2013
April 25, 2013
The Oregon Department of Consumer and Business Services (DCBS) issued a final cease-and-desist order against Western Sky Financial, LLC, and fined the company $17,500 for making loans in Oregon without a proper license. Western Sky was charging interest rates in violation of Oregon law, the regulator said.
Western Sky, based in South Dakota, promoted its loans through an aggressive TV and radio advertising campaign in many states, including Oregon. Western Sky made loans to at least seven Oregon residents, charging annual interest rates ranging between 89 percent and 342 percent, according to the DCBS.
State law prohibits consumer finance lenders, including Western Sky, from charging consumers an annual interest rate of more than 12 percent or 5 percent more than the Federal Reserve discount rate (currently less than 1 percent), whichever is higher. A consumer finance loan is defined as one that is $50,000 or less, has loan terms of more than 60 days with periodic payments and is used for personal or household use.
As part of the final order, Western Sky must stop all collection of interest, fees, or charges on loans made to any Oregon resident.
“Oregon law protects consumers from paying excessive interest rates and fees for consumer finance loans, and we will take action when lenders violate the law,” said David Tatman, administrator of the agency’s Division of Finance and Corporate Securities (DFCS), which regulates consumer finance lenders. “It’s worth noting in this case that even if a lender advertises its services in Oregon, it does not mean it is operating within our laws.”
Tatman urged consumers to protect themselves by checking to see if a lender is licensed in Oregon by going to the DFCS website at http://www.cbs.state.or.us/dfcs/online.html or by calling the division toll-free in Oregon at 866-814-9710.
In related news, the Washington State Department of Financial Institutions (DFI) is also seeking restitution and prohibition order against Western Sky Financial.
“Credit unions should continue to work with their members and offer alternatives to costly payday lending,” said David Curtis, Director of Compliance Services for the Northwest Credit Union Association (NWCUA).
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.