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AG Nessel Protects Consumers from Alleged Predatory Lender
April 16, 2020
LANSING – Online tribal lender Sierra Financial LLC has agreed to an assurance of voluntary compliance with the state, months after Attorney General Dana Nessel filed Michigan’s first lawsuit alleging violations of the federal Consumer Financial Protection Act.
Sierra Financial, an online lending company incorporated under the laws of the California-based Iipay Nation of Santa Ysabel, has also been known as Tall Grass Finance and Sierra Lending LLC.
Nessel in October 2019 filed a lawsuit against Sierra Financial following complaints of predatory lending and offering or otherwise providing exorbitant interest rate loans in Michigan. That lawsuit has been dismissed as a result of the compliance agreement, which includes numerous assurances from Sierra Financial.
Under the agreement, the business will cease marketing and making new loans to Michigan consumers as of March 5, 2020, and will limit collection on any existing loans up to the principal amount, with all repayments being applied to the principal amount borrowed. If the company seeks to do business in Michigan again, it must give the Attorney General’s office 120 days’ notice of its intentions.
“Loans with excessively high interest rates are a clear violation of state consumer protection laws, and my office will not stand for predatory lenders that take advantage of people, especially those asking for help to pay their bills,” Nessel said. “Many people need financial assistance at one point or another, and companies that employ deceptive tactics and act in bad faith should not be permitted to operate in Michigan.”
Complaints indicated consumers were surprised by hidden terms and exorbitant interest rates and fees. Many of the complainants attempted to pay off their loans early and were told they could not or that they had to wait, resulting in additional fees and interest being owed, often exceeding interest rates of 300 percent. Michigan usury laws cap annual interest rates at 7 percent and interest rates exceeding 25 percent are subject to criminal charges under Michigan usury laws.
Michigan residents are urged to report any violation of the Consumer Protection Act online or by calling 877-765-8388.