S.D. Lender That Claimed Tribal Immunity Ordered to Stop Making Loans in Md.

June 13, 2013
Baltimore Sun  
payday lending news

The Maryland Department of Labor, Licensing, and Regulation's Division of Financial Regulation has issued a final cease and desist order against Western Sky Financial, a South Dakota-based payday lender, to stop it from making loans in the state. The division accuses the company of charging excessive interest rates and engaging in predatory lending practices. The loans issued by Western Sky had interest rates from 120 percent to more than 1,800 percent -- much higher than state law allows -- but the company claimed its location on a reservation in Timber Lake, S.D., afforded it tribal immunity and, therefore, it did not have to follow Maryland law. The division says the company, which is not licensed in Maryland, does not have a business model that entitles it to tribal immunity.
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