Consumer Financial Protection Bureau Files Against Four CA Lenders
Such sweet names – Golden Valley Lending, Inc. Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. – but, according to the cfpb, such deceptive practices…According to the Consumer Financial Protection Bureau (CFPB), each of the above listed lender corporations are owned and incorporated by the Habematolel Pomo of Upper Lake Indian Tribe, a federally recognized Indian tribe located in Upper Lake, California. And according to the CFPB, each organization has violated the FDCPA rules when collecting obligations that they are not allowed to collect.
The Consumer Financial Protection Bureau (CFPB) filed against the four online lenders–Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. for collecting debt not legally owed them through deceit of consumers.
How does that happen? The loans were void under state laws due to interest rate caps or due to the licensing of the lenders. In short, because the entities did not correctly adhere to state law and licensing, they had no right to issue the loans, nor to collect on the type of loans issued. The CFPB is seeking recovery for those consumers who were harmed.
Prior to issuing a new loan by a lender, the lender must disclose the annual percentage rate, or the effective cost of the loan, under the Truth in Lending Act (TILA) also referred to as Reg Z. Regardless of whether the lenders are licensed in their home state, when loans are issued and recorded in other states (jurisdictions), the lenders must be properly licensed in that jurisdiction.
The individual loans were small, but in its complaint, the CFPB stated that from August 2013 to December 2013, Silver Cloud and Golden valley originated a total of approximately $27 million in loans and collected a total of approximately $44 million from consumers. Everything from lead generation to post origination customer service and debt collection was handled by Silver Cloud and Golden Valley or an affiliated firm.
At the time of the complaint, CFPB noted that on one of the tribe’s websites, the finance charge was described as follows: “Each installment payment will contain a service fee of $30 per hundred borrowed, which is charged every two weeks, and an amount equaling five percent of your initial principal loan.” Since that time, the site has been updated to reflect that “You can repay your loan using our standard repayment schedule, you can pay additional amounts toward your principal on scheduled payment due dates, and you can pay off your loan in full at any time without penalty.”
The case is active, and the results are not in, but if you feel your rights have been violated, talk to our experienced, licensed attorneys and find out how to protect yourself. A copy of the complaint filed in federal district court is available at: http://files.consumerfinance.gov/f/documents/201704_cfpb_Golden-Valley_Silver-Cloud_Majestic-Lake_complaint.pdf