CFPB: CashCall Owes $287 Million in Restitution, Penalties

The Consumer Financial Protection Bureau (CFPB) asked a federal judge in California on November 19th to hit CashCall with $287 million in restitution and penalties for making thousands of loans that borrowers were not legally obligated to repay. CashCall worked closely with Western Sky Financial, a company owned and operated by a Cheyenne River Sioux tribal citizen, but not affiliated with the tribal government itself. Western Sky would almost immediately sell loans it originated to CashCall for management and collections.

Last year, a federal judge ruled that CashCall was actually the “true lender” in its agreement with Western Sky, and tribal law did not apply to the loan transactions. The high interest rates charged by Western Sky and enforced by CashCall often violated state usury laws, and Western Sky founder J. Paul Reddam has paid the price for those illegal loans ever since.

Now the CFPB is poised to restore millions of dollars to borrowers deceived by CashCall and Western Sky’s sham relationship and penalize the company for attempting to circumvent established law. For Indian Country to succeed, it is important that tribes move beyond the failings of others. Unlike Western Sky, all NAFSA member tribal lending entities are arms of sovereign tribal governments, organized under tribal laws, financially accountable to the tribal government and its citizens, and operate with the purpose of improving the lives of tribal citizens within their communities. Regulatory commissions at each NAFSA member tribe ensure compliance with tribal and federal lending laws and NAFSA Best Practices add an extra layer of accountability and oversight. NAFSA is pushing its members toward a more sustainable future in lending, leaving Western Sky and its progeny in the past.