The Consumer Financial Protection Bureau (CFPB) announced its first-ever action against an online loan servicer. The agency said California-based CashCall Inc. engaged in unfair, deceptive and abusive practices by collecting on illegal loans made through Western Sky Financial, an online tribal lender that stopped making loans in September after several attorneys general launched probes into alleged state law violations.
The CFPB said numerous Western Sky loans were void because they violated the consumer protection laws of various states. The agency’s lawsuit said CashCall broke the law by collecting on those void loans. The bureau also sued J. Paul Reddam, owner of CashCall, and two other companies he controls, WS Funding and Delbert Services Corp.