Ill. Reaches Settlement With Payday Loan Companies
CHICAGO, Ill. (KFVS) – Illinois Attorney General Kwame Raoul announced that the state has reached an agreement with three online payday loan companies.
The settlement with MoneyMutual LLC, PartnerWeekly LLC and Selling Source LLC resolves allegations by the Attorney General’s Office and the Illinois Department of Financial and Professional Regulation (IDFPR) that the companies violated state laws on ready.
The settlement filed with the Cook County Circuit Court requires companies to immediately stop offering loans to borrowers in Illinois without being licensed.
All three companies have been accused of generating unlicensed payday loan leads and arranging high-cost payday loans for out-of-state payday lenders, some also unlicensed.
“Payday 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,” said Raoul. “I am committed to protecting Illinois residents from payday lenders who operate illegally and trap people in expensive loans with unaffordable interest rates.”
The regulations prohibit the three companies from pursuing the following practices:
- Arrange or offer small loans, online or otherwise, without being approved by the IDFPR.
- Advertise or offer small consumer loan deals or lead generation services in the state of Illinois, unless authorized by the IDFPR.
- To provide services related to arranging or providing small dollar loans to consumers in Illinois without being licensed by the IDFPR.
The attorney general’s office sued the companies in 2014 after the companies refused to comply with a cease and desist order issued by the IDFPR requiring them to obtain a license.
According to the lawsuit, MoneyMutual attracted borrowers in part by using ads featuring former TV host and celebrity spokesperson Montel Williams.
The companies have reportedly been successful in collecting personal financial information from tens of thousands of Illinois consumers who applied for loans on MoneyMutual’s website. The companies have been accused of selling the personal information to payday lenders who used it to offer loans to potential borrowers.
Senior Deputy Attorney General Tom James handled Raoul’s Consumer Fraud Bureau trial.
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