Federal regulator sues four KC area payday lending companies

The Consumer Financial Protection Bureau on Thursday accused four companies with operations in suburban Kansas City of running an illegal payday lending operation, marking another investigation into an industry with an ongoing and sizable presence in the area.

A federal lawsuit filed in the Northern District of Illinois asks for a permanent injunction on the business activities of Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial, all companies incorporated on a tribal reservation in Northern California but which do business at a call center in Overland Park, Kansas.

The CFPB lawsuit accuses the companies of collecting on loans that violated state usury and lender licensing laws; an $800 loan carried a contract that would require the consumer to repay $3,320 over 10 months. It also said the companies didn’t disclose loan terms such as annual percentage rates until after a borrower was approved for a loan.

A lawyer representing the defendant companies disputed the government’s claims and said the businesses operated legally. The tribe’s attorney said the CFPB was wrong on the facts and the law.

Read more: Kansas City Star


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