LITTLE ROCK, Ark. (Legal Newsline) — Arkansas Attorney General Leslie Rutledge has announced her office has settled a consumer protection lawsuit against Western Sky Financial, CashCall Inc., WS Funding, Martin A. Webb and J. Paul Reddam that had alleged the entities conspired to offer illegal payday loans.
The defendants purportedly offered payday loans with interest rates as high as 342 percent, which violates state law. Western Sky attempted to allege that, because it identifies as a Native American tribal entity, it is protected by tribal sovereign immunity. The state charged, however, that Western Sky is not protected because it is not owned or operated by a tribe. Additionally, consumers in Arkansas not on tribal lands used the website to apply for loans.
The alleged scheme involved Western Sky originating payday loans and then assigning them to WS Funding to collect. CashCall and its subsidiaries ran most of Western Sky’s operations.
“Arkansans who were in a time of need sought the online lending services of the defendants and were regrettably handed more debt,” Rutledge said. “Although traditional storefront payday lending has been eliminated in Arkansas, the risk to Arkansans from online payday lenders is quite high. My office will continue to protect consumers against these illegal activities and will notify those who are eligible to receive restitution payments under this settlement.”