New York regulators have determined that Western Sky, along with a wide variety of associated companies, are no longer welcome in their state. One of the great things about the American federal system is that states are allowed to make such decisions and claims when they would like. Although the federal government has not brought charges against Western Sky in order to stop them from operating any longer, the state of New York is hoping to get rid of their influence over the state’s residents.
Lending in New York
According to the lawsuit filed by New York prosecutors, since the year 2010 Western Sky has managed to accumulate nearly 18,000 loans to individuals in the state. The loans for these 18,000 individuals has reached the mark of $38 million in principal. Even though this seems like a lot of money, the New York prosecutors are quick to point out that this investment will raise them nearly $185 million in outstanding loans and finance charges. This type of profit on the backs of hard working New York residents is exactly what the government is trying to go after.
It isn’t just Western Sky that is not being welcomed in New York. There are many other associated companies where the money is coming from that makes it hard for people to stomach their dealings. The CashCall Inc. and WS Funding LLC are both recognized in the lawsuit as parties within this ring. Although Cash Call is just a servicer or Western Sky’s loans.
What is the Western Sky Lawsuit Going to Do?
The Western Sky lawsuit offers an opportunity for regulators to get rid of the company in their state. It sets precedence that it is possible for state regulators to want lending practices that do not exceed a certain limit. Once the case is resolved, it will lead to a wider range of denials and prohibitions in other states as well.
Given the amount of money that the Western Sky company has loaned to New York individuals, it makes sense that they would fight this to the best of their abilities. Even with all of their lawyers and financial might, it may not be enough to stop the public opinion in New York. Most people are fed up with predatory lending in the New York area after the Mafia had such dealings with people throughout the past few decades. New York payday loan laws are clear regarding these types of cash advances.
Payday Loan Industry Fallout
The fallout from the payday loan industry is nothing new. People have been having problems with payday loans for a long time and it is no wonder that there are so many potential lawsuits about to be filed. Most of the time, it is possible for payday loan companies to get out of hot water by showing that they are providing a service with risk that nobody else is willing to take. Either way, the Western Sky lawsuit is going to be something that is talked about in legal history for a long time to come and it may not be in the best interests of the payday loan industry.
