Online Payday Loan Companies Ignoring Colorado Law
DENVER (CBS4) – The state of Colorado has a new payday lending law, but some online loan companies apparently feel they don’t have to obey it. The reason is they are affiliated with Native American tribes.
Demetrius Marez was one such customer. He was in a difficult financial position and like so many other people he needed a loan help pay bills and care for his family. On the Internet Marez found the cash just a few clicks from any number of online lenders anxious to give it out.
“I borrowed $700,” Marez said. “I paid, I think it was $120 for the initial fee, and then another $80 on top of that.”
He paid the money back quickly, but that wasn’t the end.
“I didn’t call them to cancel the loan even though it was paid in full,” Marez said. “Because I didn’t cancel it, they hit me for another charge of $80.”
The company he borrowed from displays annual percentage interest rates of up to 1,365 percent for Coloradans, despite the state legislature passing a bill last year requiring much more favorable terms.
But the company that made the loan claims it does not have to abide by that law. Marez had no idea he was dealing with a Native American tribe. On the website it reads “terms of your loan subject to the Otoe-Missouria Tribe American Web Loan Act.”
But Colorado Attorney General John Suthers insists Colorado’s payday loan law must be followed. The state has also taken legal action seeking records of a company called Cash Advance, which it believes is operated by AMG Services. It runs payday lending operations as part of the Miami Nation of Oklahoma.
Scott Allen Tucker is named by the state as a key player for AMG. He spent a year in federal prison in 1991 for fraudulent business loans. He pleaded guilty to two felony charges of mail fraud and making a false statement to a bank.
Tucker now has an $8 million home in Aspen in his wife’s name with property taxes paid for by AMG services. He flies on a corporate jet and races a fleet of expensive cars.
Tucker’s attorney responded to CBS4 with a letter saying, “Mr. Tucker does feel the Colorado attorney general’s office has pursued him in a wrongful manner and multiple courts of law in both Colorado and Kansas have agreed.”
The legislator who sponsored the payday lending bill, Rep. Mark Ferrandino, feels companies like Tucker’s are flouting the law.
“Just because you are exempt from the state laws … and get around those laws; that’s hurting consumers all across Colorado,” Ferrandino said.
As for Marez, next time if he needs a loan he says he will look elsewhere.
In a statement the chief of the Miami Nation of Oklahoma says it is fully regulated by sovereign laws, compliant with federal laws, categorically abhors and does not participate in unethical scams.
CBS4 called and wrote to the Otoe-Missouria tribe, but our so far it has not offered a comment.