Think Finance has agreed to cancel all of its outstanding loans and make $40 million in payments to consumers after it was accused of evading state payday lending laws by using Native American tribal laws.
The Texas-based company was sued in 2017 by the Consumer Financial Protection Bureau and reached a $7 settlement.
The company was also the subject of numerous lawsuits filed by consumers in Vermont, Virginia, Florida, North Carolina and California, alleging their loans had interest rates as high as 375% and payment plans that made it “nearly impossible” to repay the loans, according to a published report.
Think Finance, which filed for bankruptcy protection 2017, was accused of helping originate $35 million of loans and collect on $56 million of principal and interest payments by providing a platform for lenders to gouge consumers by charging higher-than-allowed interest rates or by making loans when it did not have a proper license to do so.
As part of the settlement, the $40 million will be put into a trust and be disbursed to affected consumers. The company has also agreed to cancel all of its outstanding loans, of which there are an undetermined number still being paid off. The agreement must be approved by a bankruptcy court judge before it can become effective.
