I-Team: State takes on payday lender Western Sky Financial - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

I-Team: State takes on payday lender Western Sky Financial

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The Attorney General's Office says an out-of-state pay lender is operating illegally in Georgia by offering loans with crushing interest rates of up to 340 percent.

This payday loan operation has been ordered – more than once – to stop doing business here. But, the I-Team's Dana Fowle says this South Dakota lender is pushing back.

The AG says a company called Western Sky continues to do business in Georgia despite a year ago agreeing to stop.
 
A man needing money to afford flying to California to accept a national award he earned turned to an online loan through Western Sky Financial.   He said it was easy; just a quick phone call and a few questions.

He borrowed just more than $2,500. But, a year into almost $300-a-month payments – which amounted to $294.46 – his loan was only going down a few bucks at a time.  He couldn't figure it out, until he called Western Sky. Then things became crystal clear.

He learned what the Georgia Attorney General has been hearing from customers for a few years now.  Western Sky is a payday lender offering outrageously high-interest loans.  In this case, his interest rate was more than 139 percent ($139.13); which meant that this $2,500 loan would end up costing him $14,000 ($13,985.07).  He filed a complaint with Georgia.

The state told him it was illegal.

In a lawsuit, the Georgia Attorney General's office says the South Dakota company violated the Payday Lending Act. It's been ordered to stop selling loans to Georgians.  In a document filed with the suit, Western Sky Financial management says that "no other state or federal law" applies to this loan. Western Sky sits on the Cheyenne River Sioux Tribe reservation.

The State countered that the company is headquartered on the reservation, but has nothing to do with the Tribe.  

Meanwhile, the man who took out the loan has suspended his payments.  He says he doesn't mind paying what he owes, but he's not paying more than he should.

Aside from the lawsuit, the AG got a temporary restraining order against the company.  For the next 30 days, Western Sky can't offer loans in Georgia or even collect on them.

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