CHARLESTON — West Virginia Attorney General Patrick Morrisey's office has reached a $13 million settlement with CashCall, Inc., a non-bank private lender found to have engaged in abusive debt collections.

The settlement, which was finalized last week in Kanawha Circuit Court, requires CashCall to make an immediate $10 million lump sum payment. That money will be distributed to affected consumers beginning in 90 days.

The additional $3 million will be paid in $375,000 installments over the course of two years.

Morrisey said the settlement brings closure to hundreds of consumers. Terms of the settlement received final approval from Kanawha Circuit Judge Duke Bloom.

“This settlement shuts the door on years of litigation, but most importantly compensates those residents who were harmed by CashCall’s unfair business practices,” Morrisey said in a statement.

West Virginia’s action accused CashCall of using a ‘rent-a-bank’ model to skirt the state’s consumer protection laws. The trial court determined its loans were unlawful and canceled each one, while imposing stiff civil penalties for CashCall’s actions.

The circuit court’s judgment, upheld by the West Virginia Supreme Court of Appeals in May 2014, found CashCall engaged in abusive debt collections, violated state lending laws, owed consumers restitution and forced the company to reimburse the state for attorneys’ fees.

CashCall unsuccessfully appealed a portion of the judgement to the U.S. Supreme Court.

Morrisey's office claimed CashCall partnered with another bank to make it appear as though the bank was the lender, when, in fact, CashCall marketed and sold loans, as well as provided funding and collected on those loans, thus “renting” the partnering bank’s name and charter to avoid certain state regulations.

CashCall must pay installments of $375,000 every three months over the course of two years. The first installment comes due three months from now.

The settlement also carries a penalty provision should CashCall be 15 days delinquent with any installment. That could result in the reinstatement of the court’s original judgment, plus accrued interest minus any prior payment.

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