CashCall Inc. and Western Sky Financial LLC have settled another state action over alleged charging of interest rates in excess of the 18 percent limit.  The action, filed by the Florida Office of Attorney General, alleged that loans with illegal interest rates were made to consumers by Western Sky and were later purchased, serviced, or collected by CashCall.

Under the settlement, the lenders will pay $1.25 million to the State of Florida and approximately $11 million to affected borrowers.  Eligible borrowers include consumers who paid their loan in full or made total payments greater than what would have been due had the loan been originated at an 18 percent interest rate.

In addition to the monetary payment, the lenders will also be barred from collecting or enforcing more than $15 million in outstanding loan balances, and will be barred from future lending in Florida.  CashCall’s lending license will be revoked, and the settlement terms impose on CashCall’s owner, John Paul Reddam, a lifetime ban prohibiting him from obtaining any license from the Office of Financial Regulation.  A copy of the Stipulated Final Judgment and Order is available here.

In addition to the Florida settlement, CashCall also entered into a settlement with the Attorney General for the District of Columbia in the amount of $3 million earlier this year.  A copy of that Consent Order and Judgment is available here.  The D.C. settlement follows previous deals CashCall reached with other states including Minnesota, Arkansas, Nebraska, and Michigan.  Settlements in those states involved allegations of unlawfully high interest rates.

CashCall also settled a consumer class action that alleged the company offered, serviced, and collected on Western Sky loans with illegal interest rates of more than 18 percent.  A district judge in the Southern District of Florida approved that settlement in December.  A copy of the settlement agreement is available here.