On September 23, Minnesota Attorney General Keith Ellison announced that the U.S. District Court for the District of Minnesota approved a settlement agreement between his office and officials of a tribal-owned online lender that the attorney general alleged charged interest rates approaching 700 percent on small-dollar loans to state consumers. The attorney general filed the lawsuit in March, alleging the lender violated the federal CFPA as well as state laws pertaining to usury, regulated loans, short-term loans, consumer fraud, deceptive trade practices, and false advertising by issuing loans (typically between $350 and $1,500) at rates more than 80 times the state’s legal cap. The lender maintained that state law did not apply because the company is owned by a federally recognized Native American tribe and, while agreeing to the terms of the settlement, did not admit to any alleged wrongdoing.

Under the settlement, the lender agreed to stop charging or collecting interest on existing loans to state consumers, with all accrued interest cancelled and past payments credited toward principal. The lender is also permanently barred from marketing, advertising or making loans to state residents unless it agrees to comply with state consumer lending laws, and must provide the attorney general 120 days’ notice prior to restarting any lending in the state. The settlement does not impose monetary penalties or damages.