ST. PAUL, Minn. (FOX 9) - Alleging their "predatory" small loans charge anywhere from 400% to 800% in interest, Minnesota Attorney General Keith Ellison has announced a lawsuit against several online lending companies operating throughout the state.
Ellison’s office announced Wednesday it has filed a federal lawsuit against online lenders Bright Lending, Green Trust Cash and Target Cash Now for consumer fraud after issuing thousands of loans to Minnesotans that were in violation of Minnesota and federal laws. The three online lenders operate under the control of the Island Mountain Development Group.
"These businesses have been engaging in the worst kind of predatory lending, and I’m glad to bring this lawsuit to stop the harm they are causing and help people afford their lives," Ellison said in a statement.
According to the lawsuit, when consumers reviewed loan documents or complained about the interest, they were often told Minnesota law that caps rates do not apply because the lenders operate online and are owned by Native American tribes.
However, Ellison's office says this is illegal and the lenders' statements to consumers were false, noting a business that sells in Minnesota must comply with Minnesota’s consumer-lending laws, regardless of whether it makes the loan online, according to a statement. The lawsuit intends to enforce Minnesota’s statutory interest-rate caps, or "usury" laws.
The Minnesota Attorney General's website details a wide range of restrictions on payday, or short-term, loans as well as consumers' rights and protections.