KANSAS CITY, Mo.--(BUSINESS WIRE)--The law firms of Stueve Siegel Hanson LLP, Chitwood Harley Harnes LLP, Tycko & Zavareei LLP, and Kopelowitz Ostrow P.A. announce that they have filed several cases across the country seeking to hold numerous banks liable for knowingly collecting payments on illegal payday loans. Payday loans are short-term loans with extraordinarily high rates of interest. Payday lenders, many of which have fled to the Internet after being barred from operating in numerous states, often prey on the vulnerable and desperate even in states where their loans are illegal. The suit alleges Internet payday lenders could not operate in the states that have banned payday loans without the willing cooperation of certain state and national banks.
According to the lawsuit, the banks, known as Originating Depository Financial Institutions (“ODFIs”), collude with payday lenders to originate entries on the interbank ACH Network, providing a gateway for payday lenders to debit borrowers’ accounts. In many states, including New York, New Jersey, Maryland, Pennsylvania, Ohio, West Virginia, Connecticut, Georgia, and North Carolina, these loans are illegal and unenforceable and payments on the loans could not be collected without the assistance of the ODFI banks. The complaints allege that the ODFIs, which include BMO Harris Bank, First Premier Bank, National Bank of California and Bay Cities Bank, violate state law and the Racketeer Influenced and Corrupt Organizations (RICO) Act by knowingly collecting unlawful debts at the request of barred payday lenders in states that have outlawed payday loans.
|Stueve Siegel Hanson LLP||Chitwood Harley Harnes LLP|
|Kansas City MO||New York NY|
|Tycko & Zavareei LLP||Kopelowitz Ostrow P.A.|
|Washington D.C.||Ft. Lauderdale FL|