The Oregon Department of Consumer and Business Services issued a final cease-and-desist order and fined Western Sky Financial, LLC $17,500 for making loans in Oregon without a proper license and for charging interest rates in violation of Oregon law.
Western Sky, based in South Dakota, promoted its loans through an aggressive TV and radio advertising campaign in many states, including Oregon. Western Sky made loans to at least seven Oregon residents, charging annual interest rates ranging between 89 percent and 342 percent.
State law prohibits consumer finance lenders, including Western Sky, from charging consumers an annual interest rate of more than 12 percent or 5 percent more than the Federal Reserve discount rate (currently less than 1 percent), whichever is higher. A consumer finance loan is defined as one that is $50,000 or less, has loan terms of more than 60 days with periodic payments and is used for personal or household use.
As part of the final order, Western Sky must stop all collection of interest, fees, or charges on loans made to any Oregon resident.
"Oregon law protects consumers from paying excessive interest rates and fees for consumer finance loans, and we will take action when lenders violate the law," said David Tatman, administrator of the agency's Division of Finance and Corporate Securities (DFCS), which regulates consumer finance lenders. "It's worth noting in this case that even if a lender advertises its services in Oregon, it does not mean it is operating within our laws."
Tatman urged consumers to protect themselves by checking to see if a lender is licensed in Oregon by going to the DFCS website at http://www.cbs.state.or.us/dfcs./online.html or by calling the division toll-free in Oregon at 866-814-9710.