Ill. reaches settlement with payday loan companies
CHICAGO, Ill. (KFVS) - Illinois Attorney General Kwame Raoul announced the state has agreed on a settlement with three online payday lending companies.
The settlement with MoneyMutual LLC, PartnerWeekly LLC and Selling Source LLC resolves allegations from Attorney General’s Office and the Illinois Department of Financial and Professional Regulation (IDFPR) that the companies violated state lending laws.
The settlement filed in Cook County Circuit Court requires the companies to immediately stop offering loans to Illinois borrowers without being licensed.
The three companies were accused of generating payday loan leads without being licensed and arranging high-cost payday loans for out-of-state payday lenders, with some unlicensed as well.
“Payday loan lenders disproportionately target low-income communities and communities of color, and they make it extremely difficult, if not impossible, for people to escape the cycle of poverty,” Raoul said. “I am committed to protecting Illinois residents from payday lenders that operate illegally and trap people into expensive loans with unaffordable interest rates.”
The settlement prohibits all three companies from continuing the following practices:
- Arranging or offering small-dollar loans, online or otherwise, without being licensed by IDFPR.
- Advertising or offering any small consumer loan arrangements or lead generation services in the state of Illinois, unless they are licensed by IDFPR.
- Providing services related to arranging or offering small dollar loans to Illinois consumers without being licensed by IDFPR.
The Attorney General’s Office filed lawsuits against the companies in 2014 after the companies refused to comply with a cease and desist order issued by IDFPR requiring them to become licensed.
According to the lawsuit, MoneyMutual attracted borrowers in part by using advertising which featured former television host and celebrity spokesman Montel Williams.
The companies allegedly managed to collect personal financial information from tens of thousands of Illinois consumers who sought loans on MoneyMutual’s website. The companies were accused of selling the personal information to payday lenders who used it to offer loans to potential borrowers.
Senior Assistant Attorney General Tom James handled the lawsuit for Raoul’s Consumer Fraud Bureau.
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