Posted 10/1/2013 02:15 pm
Updated 11 months ago
Attorney General Dustin McDaniel said Tuesday that his office filed a lawsuit against three companies and two people he accused of colluding to offer illegal payday loans to Arkansans while claiming to be affiliated with a Native American tribe.
McDaniel’s lawsuit against Western Sky Financial, CashCall Inc., WS Funding, Martin A. Webb and J. Paul Reddam alleges that the defendants offer online payday loans with interest rates as high as 342 percent in violation of Arkansas law.
Western Sky, based in South Dakota, identifies itself as a tribal entity protected by tribal sovereign immunity. McDaniel said Western Sky is not protected by tribal immunity and that it is not owned or operated by a tribe.
McDaniel said CashCall and its subsidiary, WS Funding, are based in California and owned by Reddam. Martin Webb, also known as Butch Webb, owns Western Sky.
"Though we have successfully eliminated storefront payday lending in Arkansas, some online lenders continue to offer the kinds of loans that often push consumers further into debt," McDaniel said in a news release. "The defendants claim to be protected by tribal immunity, but we intend to prove they are not and we will ask the Court to prevent them from making these harmful loans in our State."
McDaniel said Arkansas consumers have been offered loans in amounts ranging from $850 to $10,000 with annual percentage rates of between 89 percent and 342 percent.
In his lawsuit, filed Tuesday in Pulaski County Circuit Court, McDaniel asks the court to prohibit the defendants from offering illegal loans in Arkansas and order the defendants to pay restitution, civil penalties, attorneys' fees and costs.