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4 December 2024

Minnesota AG Enters Into Consent Order Over High-Cost Online Lenders, Discharging Over $1 Million In Loans

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On Tuesday, November 26, the Minnesota Attorney General's office (AG) announced it filed a consent order to resolve allegations that online lenders were charging interest on loans in excess of the amounts prescribed...
United States Minnesota Finance and Banking

On Tuesday, November 26, the Minnesota Attorney General's office (AG) announced it filed a consent order to resolve allegations that online lenders were charging interest on loans in excess of the amounts prescribed under Minnesota usury laws. Under the consent order, over $1 million in allegedly illegal loans were discharged.

The AG alleged that multiple online lenders operating under a tribally owned holding entity violated Minnesota usury laws by charging interest on short-terms loans in excess of 36%. The AG alleged that some of these loans carried interest rates of 200–800%. The AG further alleged that these lenders misrepresented the legality of the loans and interest rates to consumers when they claimed the usury law was inapplicable to loans originating from a tribal entity.

Under the Consent Order, the lenders may no longer originate short-term loans with interest rates that exceed 36%. Additionally, the lenders may not continue to collect on loans that allegedly violate Minnesota law, which will result in the discharge of over $1 million in loans.

The post Minnesota AG Enters into Consent Order Over High-Cost Online Lenders, Discharging Over $1 Million in Loans appeared first on Consumer Finance Insights (CFI).

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