As bankruptcy lawyers, we often see people who are in financial distress turn to some pretty unsavory companies. We see the predatory nature of the loans involved and the damage inflicted because of such loans.
Now, one of those companies, Western Sky Financial, says it will stop making loans. It is being reported in multiple media outlets that Western Sky will no longer be making their ultra high interest loans after September 3 as a result of governmental enforcement actions.
As being reported in the Wall Street Journal, several states have filed enforcement actions against Western Sky alleging that its loans violate state licensing and lending laws. Western Sky contended that it was a entitled to tribal immunity because one of its owners is a member of the Cheyenne River Sioux tribe. To date, every court that has considered this proposition has rejected Western Sky’s claim that it is entitled to tribal immunity.
Unfortunately, even though Western Sky says it will stop making loans, there are a large number of “loans” still outstanding. If you have a payday loan from an out-of-state lender or an on-line lender, you should consult with a lawyer in your area to see if that loan is also illegal.
Remember, they don’t call them loan sharks for nothing.
(As an aside, these companies give sharks a bad name. See here for shark conservation awareness).
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Last modified: August 27, 2013