Maryland Orders South Dakota Lender To Stop Making Loans In State

The Maryland Commissioner of Financial Regulation has ordered three South Dakota companies and their owner to stop making unlicensed consumer loans in Maryland and from trying to collect payment on loans they previously made to state consumers.

The final order against Western Sky Financial LLC, Great Sky Finance LLC, Payday Financial LLC and Martin A. Webb also requires them to pay a $137,000 civil penalty and refund amounts consumers paid the companies. That includes $19,815 paid by 26 consumers who allegedly applied for and received loans from April 2009 through June 2011.

The May 22 final order, which Commissioner Mark Kaufman’s office disclosed Thursday, alleged that Western Sky and the other companies made short-term loans to Maryland consumers at annual interest rates ranging from 120 percent to 1,825 percent. The order alleged that Western Sky and the other companies are not licensed to offer loans in Maryland and that the interest rate charged exceeded that allowed under Maryland law. Maryland law prohibits lenders from charging an annual interest rate of more than 33 percent on unpaid loan balances of up to $1,000 or more than 24 percent on unpaid balances over $1,000.
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