The CFPB has filed an amended complaint in its lawsuit against CashCall and several related companies that funded, purchased, serviced and collected online payday loans to identify additional states in which the loans defendants sought to collect were purportedly void in whole or in part as a matter of state law. The loans in question were made by a tribally-affiliated lender the CFPB did not sue.
Filed in December 2013 in the U.S. District Court for the District of Massachusetts, the lawsuit broke new ground by asserting UDAAP violations based on the defendants’ efforts to collect loans that were purportedly void in whole or in part under state law. The CFPB’s complaint alleged that the loans in question were void in whole or in part as a matter of state law because the lender charged excessive interest and/or failed to obtain a required license. The complaint identified eight states with laws of this kind—Arkansas, Arizona, Colorado, Indiana, Massachusetts, New Hampshire, New York and North Carolina—and alleged that the effort to collect amounts in excess of the amounts lawfully due under state law was “unfair,” “deceptive” and “abusive” as a matter of federal law.
In the amended complaint, the CFPB has added another eight states with similar laws that purportedly made the loans the defendants sought to collect void in whole or in part. The new states are Alabama, Illinois, Kentucky, Minnesota, Montana, New Jersey, New Mexico and Ohio.
Also named as a defendant in the CFPB’s lawsuit was J. Paul Reddam, the president and sole owner of CashCall and the president or director and sole owner of the other two defendant companies. The defendants have filed a motion seeking to have the case transferred to the U.S. District Court for the Central District of California or to have all claims against Mr. Reddam dismissed for lack of personal jurisdiction.