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Cooper announces lawsuit against online lender

By Associated Press
Published On: Dec 16 2013 10:18:05 PM CST
roy cooper
RALEIGH, WAKE COUNTY -

Officials in North Carolina are suing an out-of-state online lender, its related companies and their owner for offering loans that in some cases charge borrowers up to 342 percent interest.

N.C. Attorney General Roy Cooper and the North Carolina Office of the Commissioner of Banks filed suit Monday against Western Sky Financial, CashCall, related companies and owner John Paul Reddam for violating state laws banning outrageous interest rates on small consumer loans.

Cooper's office said a similar lawsuit has been filed in Colorado.

South Dakota-based Western Sky says it's exempt from state laws that ban its loans because it claims to be an Indian tribal entity.

The complaint says loans of $850 to $10,000 charged annual interest rates from 89.68 percent to 342.86 percent, far above what state law allows.