Colorado: WebBank, Cross River Bank to pay $1,550,000 for exceeding interest on consumer loans
Under federal law, certain out-of-state banks can lend in Colorado at interest rates that exceed Colorado’s limits. The Attorney General alleged that non-banks Avant and Marlette illegally partnered with two out-of-state banks—WebBank and Cross River Bank, respectively—in a scheme to “rent” those banks’ ability to lend above Colorado’s rate limits.
Under the settlement, WebBank, Cross River Bank, and all of their non-bank partners, including Avant and Marlette, have agreed to provide Colorado consumers with certain protections to ensure that they are making true banks loans. Additionally, they committed that they will not lend to Colorado consumers at rates above 36% and will provide consumers with other protections required by Colorado law. In addition, non-bank partners will maintain a Colorado lending license.
The companies will pay $1,050,000 to the State of Colorado for consumer protection efforts consistent with the settlement agreement. Furthermore, the companies will make a $500,000 contribution to the MoneyWi$er program, a partnership between the Attorney General’s Office and the Colorado Department of Education that supports K-12 financial education in Colorado.
Weiser said that securing funding for MoneyWi$er is also a significant component of this settlement because it will help provide important life skills to young people as they begin planning their financial future. ■