Shot: Payday Lender Indicted Yesterday for Using Native American Tribes to Evade Regulations on His Payday Loans That Charged Interest Rates of 700%
Payday Lending Pioneer Charles Hallinan Was Indicted for Engaging in A Racketeering Scheme.
A Pennsylvania businessman considered a pioneer in the payday loan industry was indicted on Thursday for engaging in a racketeering scheme, as part of a wider U.S. crackdown on abusive lending practices. Charles Hallinan’s payday lending businesses generated more than $688 million from 2008 and 2013, according to prosecutors. He was charged in an indictment filed in federal court in Philadelphia for conspiring to violate federal racketeering laws. The indictment also charged Wheeler Neff, a Delaware lawyer whose clients included Hallinan, and Randall Ginger, a Canadian citizen who was a hereditary chief of the Mowachaht/Muchalaht First Nation in British Columbia. [Reuters: “Payday Lending Pioneer Indicted in U.S. On Racketeering Charges,” 4/7/16]
Hallinan Charged Loan Rates of 700% And Made Nearly $700 Million from 2008-2013.
“The head of a payday lending enterprise accused of charging more than 700 percent interest on short-term loans was indicted Thursday on federal racketeering charges. Charles M. Hallinan, 75, led a group that preyed on customers while taking in nearly $700 million from 2008 to 2013, according to the indictment. Hallinan operated under a string of business names that included Easy Cash, My Payday Advance and Instant Cash USA, and defrauded at least 1,400 customers. He was released on $500,000 bail after pleading not guilty at a brief court hearing Thursday in Philadelphia. His lawyers declined comment on the case.” [Associated Press: “Feds: Payday Lender Charged 700 Percent Interest on Loans,” 4/7/16]
According to Prosecutors, Hallinan Evaded Regulations Using Native American Tribes from Their Tribal Immunity.
“According to prosecutors, he tried to evade state consumer protection laws by looping in Native American tribes as the supposed lenders so they could claim tribal immunity from state regulations and deflect class-action lawsuits.” [Associated Press: “Feds: Payday Lender Charged 700 Percent Interest on Loans,” 4/7/16]
Chaser: The Next Day Two Congressmen Wrote a Letter to the CFPB Asking to Delay Its Payday Lending Rule to Address Concerns of Native American Tribes
Reps. Randy Neugebauer (R-TX) and Mick Mulvaney (R-MS) Wrote a Letter to CFPB Director Richard Cordray Urging Him to Seek Feedback from State and Tribal Officials Before Making Rules On Payday Lending.
“Reps. Randy Neugebauer and Mick Mulvaney today asked CFPB Director Richard Cordray to seek feedback from state and tribal officials before proposing new safeguards for payday loans, arguing that the consumer bureau is ignoring existing state law. In a letter, the pair of Republicans on the House Financial Services Committee requested that the CFPB hold a forum or roundtable with the officials ahead of introducing the new regulation, which the bureau is expected to propose in the coming months. Not doing so would be “irresponsible and disrespectful” to the United States Constitution’s 10th amendment, which covers states’ rights, they said. “Unfortunately, you have failed to adequately engage state and tribal officials to hear their concerns and ensure your rulemaking respects past efforts in all 50 states and lands held in trust for the benefit of federally-recognized Indian tribes,” they said. Neugebauer chairs the consumer credit subcommittee.” [Politico Pro: ” Republicans Ask CFPB to Consult State Officials on Payday,” 4/8/16]