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Virginia attorney general announces $2.7 million settlement with internet lender

State Issues State Attorney General Consumer Finance Settlement Predatory Lending

State Issues

On February 7, Virginia’s Attorney General, Mark R. Herring, announced a $2.7 million settlement with a Virginia affiliate of a New York-based internet lender to resolve alleged violations of the Virginia Consumer Protection Act (VCPA). According to the announcement, between January 2017 and July 2017, the online lender (i) offered installment loans with interest rates as high as 359 percent without qualifying for an exception to the state’s 12 percent interest cap; (ii) falsely claimed it was licensed by Virginia’s Bureau of Financial Institutions; and (iii) charged state residents an unlawful check-processing fee of $15 for payments made by check on closed-end installment loans. The attorney general’s office stated that the settlement requires the lender to disgorge more than $2 million in illegal interest payments received, provide over $300,000 in refunds to affected state consumers, and pay the state $30,000 in civil money penalties, costs, and fees. The settlement also contains a permanent injunction that prohibits the lender from misrepresenting its status as a licensed Virginia lender.

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