Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
NW Regulators Issue Final Cease Order, Fine Vs Lender
BEAVERTON, Ore., and FEDERAL Way, Wash. (4/30/13)--Regulators from Oregon have issued a final cease-and-desist order against a South Dakota-based lender, and Washington state regulators are preparing to do the same, according to the Northwest Credit Union Association.

They join a growing list of states taking legal action against Western Sky Financial LLC, based in Timber Lake, S.D.  The lender has also been named in actions by Massachusetts Division of Banks (Boston Herald April 29) and in legal actions in West Virginia, Colorado, Maryland, Missouri and Florida. The Federal Trade Commission also has accused the companies' owner, Martin Webb, as engaging in illegal collection practices (Puget Sound Business Journal Oct. 31). 

The Oregon Department of Consumer and Business Services (DCBS) issued the final cease-and-desist order against Western Sky Financial and fined the company $17,500  for making loans in the state without a proper license. Western Sky was charging interest rates in violation of Oregon law, the regulator said (Anthem Recap April 25).  DCBS said the lender promoted loans through TV and radio advertising campaign in many states and made loans to seven Oregon residents charging annual interest rates between 89% and 342%.

State law prohibits consumer finance lenders from charging more than 12% or 5% more than the Federal Reserve discount rate, which is currently less than 1%--whichever is higher. The state defines a consumer finance loan as $50,000 or less, with loan terms of more than 60 days and periodic payments, and is used for personal or household use.

Western Sky Financial also must stop all collection of interest, fees or charges on loans to Oregon residents.

In Washington, the State Department of Financial Institutions is seeking restitution and a prohibition order against the lender. "Credit unions should continue to work with their members and offer alternatives to costly payday lending," said David Curtis, director of compliance services at NWCUA.

The Puget Sound Business Journal said that thousands of Washington state residents received loans at interest rates that far exceed that state's legal limit of 12% for that type of loan.


RSS print
News Now LiveWire
African financial inclusion possible with mobile money: @IMFNews study http://t.co/0V5DTQToxY
1 minutes ago
Louise Herring's birthday is Saturday. 105 years later, her legacy lives on through her kids http://t.co/oMqGADmo0d http://t.co/T3NmS9NqEY
49 minutes ago
#Creditunions in PA and NJ hosted retirement fairs this week @PCUA and @NJCUL report.
1 hours ago
.@TheCCUL's Radebaugh suggests 2nd #RBC comment period in letter to @TheNCUA #NewsNow http://t.co/RylFuynT6g
2 hours ago
#NewsNow today Herring legacy carried forward with merger http://t.co/oMqGADmo0d
3 hours ago