Cash Call Lawsuit 2015: Everything You Need to Know

One of the biggest lawsuits of 2015 was the Cash Call lawsuit. This case involved allegations of illegal lending practices against the California-based payday loan company, Cash Call Inc. The case was closely monitored by both the financial industry and consumers alike, and it ultimately led to significant changes in the lending industry. Here’s everything you need to know about the Cash Call Lawsuit 2015:

What Happened?

In 2013, the California Department of Business Oversight filed a lawsuit against Cash Call Inc. alleging that the company was engaged in illegal lending practices. The lawsuit accused Cash Call of offering loans with interest rates that exceeded the legal limit in California, which is currently set at 36%. According to the state, Cash Call was charging interest rates that ranged from 135% to 179% APR.

The lawsuit also alleged that Cash Call was evading state usury laws by working with a bank, Western Sky Financial, which was based in South Dakota. Western Sky Financial claimed to be exempt from California state law because it was not actually located in California. However, the California Department of Business Oversight argued that Western Sky Financial was a sham company, used by Cash Call to circumvent state lending laws.

The Decision

In January 2015, a California judge ruled that Cash Call had indeed violated state lending laws. The judge found that Cash Call was not operating as a true lender, but rather was using Western Sky Financial to evade state usury laws. The judge ordered Cash Call to pay $10.3 million in restitution to borrowers who had been charged illegal interest rates.

Cash Call not only appealed the court’s decision but also took the case all the way to the United States Supreme Court. However, in June 2016, the Supreme Court rejected Cash Call’s appeal and upheld the lower court’s decision. The Supreme Court’s decision was considered to be a significant victory for consumer protection and a strong message to payday lenders who try to circumvent state lending laws.

The Consequences

The Cash Call lawsuit had significant consequences for the lending industry. After the lawsuit, many payday lenders stopped doing business in California due to the strict laws that govern lending in the state. Additionally, the lawsuit led to new regulations, including the creation of the Consumer Financial Protection Bureau (CFPB), which was established in response to the 2008 financial crisis. The CFPB is responsible for regulating payday lenders and other companies that offer financial products to consumers.

The Bottom Line

The Cash Call lawsuit was a landmark case that had a significant impact on the lending industry. The case led to significant changes in the lending landscape and is considered to be a victory for consumer protection. While payday loans can be a useful resource for those in need of short-term financing, borrowers need to be aware of their rights and be cautious when working with payday lenders. If you are considering a payday loan, make sure you understand the terms and conditions of the loan and only work with reputable lenders.

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