By Stephanie K. Mann, J.D.
Without explanation, the Consumer Financial Protection Bureau has voluntarily dismissed, without prejudice, a lawsuit against four online payday lenders. In reaction to this sudden dismissal, two industry groups have expressed their outrage.
The National Consumer Law Center deplores the action to dismiss the lawsuit against the payday lenders “who preyed on working families by making loans up to 950% that were illegal in at least 17 states.” According to the trade association, all of the payday lenders are owned and incorporated by the Habematolel Pomo of Upper Lake Indian tribe located in Upper Lake, Calif. While the lenders claim that only tribal law applies to the loans, the NCLC notes that in 2014, the Supreme Court made clear that tribes “going beyond reservation boundaries are subject to any generally applicable state law.”
“It’s outrageous that Acting Consumer Financial Protection Bureau Director Mick Mulvaney, who took more than $62,000 from payday lenders while a member of Congress, is now giving a free pass to lenders that are collecting on illegal loans that charge an obscene 950% interest,” said Lauren Saunders, associate director of the National Consumer Law Center. Allied Progress also questioned Mulvaney’s objectivity.
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