Minnesota AG Keith Ellison sues online lenders accused of charging up to 800% interest
ST. PAUL, Minn. — Minnesota Attorney General Keith Ellison is suing a trio of online lenders that he says took advantage of Minnesotans by providing loans with exorbitant interest rates.
Ellison says Montana-based Island Mountain Development Group operates Bright Lenders, Green Trust Cash, and Target Cash Now. In a lawsuit filed on behalf of 45 Minnesotans, Ellison alleges the lenders were charging between 400%-800% in annual interest, which violates federal and state laws.
One of the Minnesotans involved in the case says after receiving a $800 loan, they were pushed into a 22-installment repayment plan with an interest rate of nearly 700% — for a grand total of $4,400.
"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. "Let this serve as a warning to any other businesses charging these illegal and outrageous interest rates: if you break the law and cheat the people of Minnesota, we will put a stop to it and hold you accountable."
Ellison says consumers that complained to the lenders were told that Minnesota and federal laws don't apply because Island Mountain Development Group is owned and operated by Native American tribes. Ellison says this is false, since any "business that sells in Minnesota must comply with Minnesota's consumer-lending laws," including sovereign-owned entities.
But Ellison added that Island Mountain Development Group's sovereign status makes it impossible to directly sue it, and to gather monetary relief and penalties.
Anyone who has obtained loans with these three lenders is encouraged to call the attorney general's office at 1-800-657-3787.
A new Minnesota law will go into effect next year that caps payday loan interest rates at 36%.