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Predatory Lending

Navient Building

If a student loan company Navient Solutions does not tell a borrower of all options available, is it contributing to the predatory schemes of another company that then takes advantage of that borrower? That’s what the complaint for this class action alleges in bringing suit against both Navient Solutions, formerly known as Sallie Mae, and Studebt, which ensnared plaintiff Shawn M. Davis in an outright fraudulent arrangement. The complaint alleges, among other things, that Navient breached its contract as well as its covenant of good faith, and that Studebt committed fraud and breach of fiduciary duty, and also violated the TCPA while marketing its fraudulent scheme.

Image of Loan

Plaintiff John Underwood served in the US Air Force for twenty-three years and retired disabled on a pension in 2010. Looking for a cash advance, the complaint for this class action says, he found Future Income Payments (FIP), which in 2012 agreed to give him $10,000 in exchange for Underwood’s transfer of some of his pension to FIP for sixty months. The complaint says that the assignment of a military pension or military disability benefits is forbidden by law, but FIP tries to get around this as well as its usurious interest rates by claiming that the transaction is not a loan but a “purchase and sale” of a “future income stream.”

Car Made of Dollars

High interest rates on payday or title loans are sometimes justified by the claim that such loans are made only for short terms. But TitleMax of New Mexico, the complaint alleges, charged plaintiff Jesse Romero high interest rates on a loan that was to amortize over twenty-four monthly payments, so that he would pay $4,056.09 in interest on a loan of only $1,940.44 or be required to pay back $309 for every $100 he borrowed. The complaint alleges that TitleMax misrepresents to borrowers the ease of paying off loans, the chances of repossession, and the cost of the loan, and that in targeting the poor, TitleMax targets its “business practices to those least able to survive them.”

Tax Refund Anticipation Loans

This class action alleges that T&R Tax Service or the other defendants violated the Truth in Lending Act (TILA) in providing tax refund anticipation loans (RALs) to people in northwest New Mexico. TILA requires that companies extending credit disclose the terms so that borrowers can see what they’re paying. For example, it requires that lenders disclose the “finance charge” for the loan, meaning “all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.” The lender must then calculate the annual percentage rate (APR) of the loan. The finance charge and the APR allow borrowers to compare charges from different lenders. However, the complaint alleges that the defendants in this case provided borrowers with figures that were lower than the actual charges and added hidden charges as well.

Plain Green Logo

The complaint for this class action alleges that Plain Green and Great Plains Lending tried to use Native American tribes as a front for their lending activities in order to evade Virginia’s lending laws. Although Plain Green claimed to be owned by the Chippewa Cree tribe and Great Plains claimed to be owned by the Otoe-Missouria tribe, the complaint alleges that these were merely “rent-a-tribe” schemes in which the tribes had no participation in funding, servicing, or any of the daily functions of the companies and simply received a percentage for fronting for the company.