CHARLESTON – West Virginia Attorney General Darrell McGraw on Wednesday announced a settlement with a South Dakota-based Internet payday lender.
According to McGraw’s office, his is the first to settle with Payday Financial LLC and owner Martin A. Webb. It did business as Lakota Cash.
In court, Webb said the loans originated on the Cheyenne River Indian Reservation and, thus, were subject to tribal laws rather than the laws of West Virginia and other states. Kanawha Circuit Jude Duke Bloom, however, ruled Payday Financial was not an Indian tribe and wasn’t eligible for tribal immunity. Payday appealed to the state Supreme Court, which let Bloom’s ruling stand.
Still, Webb and Payday declined to comply, so a contempt hearing was set for Oct. 11. On Oct. 10, Payday and Webb agreed to stop making payday and other loans in West Virginia. It also agreed to pay $135,000 in refunds to 120 West Virginia consumers. They also will pay the state $5,000 for consumer protection and other educational purposes.
On Wednesday, McGraw oversaw three press conferences in Charleston, Clarksburg and Wellsburg to hand out refund checks to some of the affected consumers.
“I’m pleased to say we’ve experienced many victories against wrongdoers,” McGraw said at the first event in his state Capitol offices. “Payday loans are illegal in West Virginia, and we did not stand for this. Instead, we stood up and fought it.”
Four consumers were on hand at the Capitol press conference to received checks. They were Cathy Mullins of Chalreston, Cherry Black of Culloden, Pam Abbott of Nitro and Suzanne Spillman of St. Albans.
“I am glad that Payday Financial and Webb decided to respect the ruling of our West Virginia court,” McGraw said in a release. “Although it took a long battle to get to this point, I commend Payday Financial and Webb for their decision to refund all unlawful fees collected from West Virginia consumers and to permanently refrain from making such loans in our state.”
Also Wednesday, McGraw announced a recent settlement with another Internet payday leader called Cash-In-Advance of Florida Inc., based in Ponte Vedra Beach, Fla. The settlement with Cash-In-Advance brought $20,951.46 in cash refunds and $4,378.61 in cancelled debts for 71 West Virginia consumers.
Since his office began investigating the Internet payday lending industry and its collection agencies in 2005, McGraw’s office says it has secured 117 settlement agreements with Internet payday lenders and their collection agencies, resulting in approximately $3 million in cash refunds and cancelled debts for 8,176 West Virginia consumers.
“We’ve added another victory to our long list of achievements,” McGraw said.