CHARLESTON, W. Va. (Legal Newsline) - West Virginia Attorney General Darrell McGraw announced on Friday that the Circuit Court of Kanawha County has ordered three payday lenders to appear in court to answer McGraw's allegations of contempt.
Payday Financial, doing business as Lakota Cash, and LoanPoint LLC, and National Title Loans, doing business as National Cash 12, were ordered by Judge Louis H. Bloom to appear in court after failing to comply with subpoenas filed by McGraw's office. The order is the result of a petition for contempt filed by McGraw's office.
Bloom's order requires Lakota Cash to appear in front of him in Kanawha County Circuit Court on October 11 to show cause for why it should not be held in contempt for violating a court order. National Cash 12 and LoanPoint LLC and owner, Joe E. Strom, have also been ordered to answer to allegations of contempt.
Lakota Cash is a Timber Lake, S.D.-based Internet payday lender that is owned by Martin Webb, an enrolled tribal member of the Cheyenne River Sioux Tribe. Webb asserted in court hearings in West Virginia, Missouri, Maryland and Colorado that Lakota Cash is immune from suit by states because he is a tribal member.
Bloom originally issued a court order on Oct. 24 holding that Lakota Cash was not entitled to tribal sovereign immunity and requiring the business to comply with a subpoena issued by McGraw's office. Lakota Cash challenged the order by filing a petition for writ of prohibition with the West Virginia Supreme Court of Appeals. The court entered an order declining to hear the petition on February 9. The Supreme Court order gave Lakota Cash 30 days to comply with McGraw's subpoena.
McGraw announced on Friday that Lakota Cash has yet to comply with the subpoena, prompting the petition for contempt against Lakota Cash, LoanPoint LLC and National Cash 12.
McGraw's office has made it a priority to bring actions to stop Internet payday lenders from making predatory loans to consumers with interest rates of 600 to 800 percent.