Illegal Payday Loan Lawsuits

Stueve Siegel Hanson LLP, Chitwood Harley Harnes LLP, Tycko & Zavareei LLP, and Kopelowitz Ostrow P.A. have filed several cases across the country seeking to hold numerous banks liable for knowingly processing 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 vulnerable and desperate consumers even in states where their loans are illegal. Internet payday lenders could not operate in the states that have banned payday loans without the willing cooperation of certain state and national banks.

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 Connecticut, Georgia, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania and West Virginia, these loans are illegal and unenforceable and payments on the loans could not be collected without the assistance of the ODFI banks. In other states, such as California, payday lenders are required to obtain a state license before offering loans.

The complaints allege that the ODFIs, which include Bay Cities Bank, BMO Harris Bank, First International Bank & Trust, First Premier Bank, Four Oaks Bank & Trust, Generations Federal Credit Union, Missouri Bank & Trust, Mutual of Omaha Bank, National Bank of California and North American Banking Company, violate state law and the Racketeer Influenced and Corrupt Organizations (RICO) Act by knowingly collecting unlawful debts on behalf of barred payday lenders in states that have outlawed payday loans.

Click here to view Labajo v. First International Bank & Trust and Mutual of Omaha Bank

Click here to view Hillick v. BMO Harris Bank Complaint

Click here to view Graham v. BMO Harris Bank et al. Complaint

Click here to view Dillon v. BMO Harris Bank Complaint

Click here to view Moss v. BMO Harris Bank et al. Complaint

Click here to view Parm v. BMO Harris Bank et al. Complaint

Click here to view the Press Release

Click here to view American Banker article

If you have questions or would like additional information, please contact Norm Siegel or Steve Six at 816-714-0360 or complete the form on this page.

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