July 19--CashCall Inc. and its affiliates have reached an agreement with the Pennsylvania Department of Banking and Securities regarding alleged violations of the state's consumer lending laws in connection with unlicensed loans made over the Internet.
The Orange-based lender, WS Funding LLC, Delbert Services Corp. and their owner, J. Paul Reddam, made loans to consumers at interest rates exceeding those allowed by Pennsylvania laws, according to regulators. Additionally, the state banking office says the companies were not licensed to make loans to Pennsylvania consumers. Regulators said they received more than 100 complaints from consumers against the companies.
"The vast majority of financial services companies licensed to do business in Pennsylvania do a good job of ensuring that their customers are treated fairly," said Secretary of Banking and Securities Glenn E. Moyer. "However, we will not tolerate 'bad actors' who disregard Pennsylvania's consumer lending laws."
Under the terms of the consent agreement and order, CashCall and its affiliates will stop advertising, soliciting or making loans to Pennsylvania residents until properly licensed. They also won't be eligible to be licensed for three years. Interest rates on outstanding loans made by the companies will be adjusted to 6 percent annual interest.
The companies must pay state regulators $1 million. The funds will be used as restitution to Pennsylvanians who paid in excess of the allowed 6 percent annual interest rate and to recoup investigation and legal costs. CashCall and its affiliates also must request that credit reporting agencies remove all reports made by them regarding Pennsylvania consumers.
CashCall declined to comment.
In June, the California Commissioner of Business Oversight asked that CashCall's finance lenders licenses be suspended for up to 12 months. The complaint referenced civil or administrative actions brought against CashCall by more than a dozen states and the federal Consumer Financial Protection Bureau since 2008.
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