Illinois Attorney General Lisa Madigan has filed a lawsuit against MoneyMutual LLC, which serves as a middleman between consumers and payday lenders. The lawsuit claims the company is operating as an unlicensed lender by arranging loans that violate a state law that restricts borrower fees, and it seeks to prevent the company from marketing payday loans in the state.
MoneyMutual is not a lender but a lead generator that sells sensitive customer information, like bank-account numbers and email addresses, to payday lenders, and federal and state officials increasingly are cracking down on these businesses. Regulators hope to make it more difficult for payday lenders to operate by targeting their partners. Las Vegas-based MoneyMutual also is being investigated by the Consumer Financial Protection Bureau as part of its probe of the payday lending industry.
There are concerns that these lead generators are putting consumers' information at risk. "We don't know if that information is being protected," said Madigan, who also filed lawsuits against four payday lenders for allegedly operating without a license and other violations.