August 27, 2013

Western Sky ends payday business

Online Lender Western Sky Shutters Payday Business

By Sean SpositoAmid pressure from regulators, Western Sky Financial plans to close for business early next month.

The prominent online lender was one of several web-based payday loan shops that allegedly flouted New York's usury laws. Western Sky, which is owned by a Cheyenne River Sioux tribe, claims it operates on the tribe's South Dakota reservation.

Western Sky—along with CashCall Inc. and WS Funding—made roughly 18,000 loans to New Yorkers, doling out approximately $38 million in cash, according to the state's attorney general's office.

In a statement given at the time, Western Sky said, "we have complied with applicable laws in our business practices, and we stand behind those practices."

The lender went on to say that its practices "are governed by the laws of the Cheyenne River Sioux Tribe" and "beyond the purview of state regulation."

However, the Native American Financial Services Association, a group that advocates for tribes that offer lending services, says that Western Sky does not operate under tribal law, nor does it abide by Native American regulatory bodies.
Comment:  There's only one Cheyenne River Sioux tribe, so "a Cheyenne River Sioux tribe" is slightly incorrect.

For more on payday loans, see Western Sky Financial Investigated and Payday Lenders to Stop Deceptive Practices.

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