Western Sky Financial LLC Will Stop Funding Loans Next Week
August 29, 2013
Aug. 29, 2013
While the Labor Day celebration focuses on the social and economic achievements of American workers, ethical credit union lenders have one more thing to celebrate this year.
According to its website, Western Sky Financial LLC will stop funding loans on September 3, 2013.
Western Sky has been facing lawsuits from around the country and increased scrutiny from state regulators over the extremely high interest rates the company charges on its short-term loans. These lawsuits and fines include actions from both the Oregon DCBS and Washington State DFI.
“These companies are preying on financially struggling Washington consumers with loans at unconscionable repayment terms,” DFI Director of Consumer Services Deborah Bortner explained. “For example, when a borrower takes out a $2,600 loan from Western Sky and follows the proposed repayment schedule, it takes that borrower four years to repay the loan and costs $14,000 in interest. That is just not right. It is no wonder that complaints from our consumers continue to roll in.”
“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.”
The news that Western Sky will stop funding loans next week is likely a relief to credit unions trying to work with and educate their members about the dangers of online payday lending.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.
Posted in Compliance.