BOSTON – Attorney General Andrea Joy Campbell’s office announced it has negotiated restitution for state residents and assurance a short-term loan company will no longer do business in Massachusetts.
That company, EasyPay, faced accusations of making predatory loans to Massachusetts consumers by using banks from outside the state not subject to state law.
The Attorney General’s office announced the settlement on Wednesday, May 22.
In the agreement, EasyPay will cease all lending activities in Massachusetts. It will also provide compensation to affected consumers, including $625,000 in restitution for those who paid exorbitant interest rates.
EasyPay will also stop collecting on all active and defaulted loans within Massachusetts.
“I am grateful for my team’s leadership on this matter and taking on predatory lenders who use illegal practices to prey on our most vulnerable residents, leaving them with significant debt,” said AG Campbell. “We will continue to combat predatory lending in its many forms so that all Massachusetts residents have an opportunity to actually grow wealth.”
The investigation by the Office of the Attorney General revealed that EasyPay issued loans with interest rates beyond state legal limits. Those rates averaged over 100% annual percentage rate (APR).
EasyPay partnered with an out-of-state bank to bypass state regulations. According to the Attorney General’s office, these loans were part of a “rent-a-bank” scheme.
“Rent-a-bank” schemes allow predatory lenders to evade local interest rate caps by effectively “renting” the bank’s charter and laundering loans through banks that are not subject to state laws.
The Attorney General’s office says this settlement is part of Campbell’s plan to fight predatory lending practices and protect Massachusetts consumers from exploitation, unfair, and deceptive business practices, especially in low-income communities.
