Minnesota Attorney General Keith Ellison announced yesterday that his office has filed a consent order to resolve an investigation into several online lenders under LDF Holdings LLC. The investigation focused on the lenders’ practices of charging exorbitant interest rates on small loans, which violated Minnesota’s usury laws, and misleading consumers about their repayment obligations. The consent order, which is pending court approval, includes significant relief for affected borrowers, canceling over $1 million in illegal loans, some of which had been placed with a collection agency and already collected.
The Attorney General’s Office acted after reviewing consumer complaints indicating that the lenders targeted Minnesota residents in financial distress through online ads, encouraging them to take out small loans of less than $2,000. However, many borrowers were shocked to find themselves trapped in loans with interest rates ranging from 200% to 800% annually, far exceeding Minnesota’s legal limit of 36% for consumer short-term loans.
Lenders included under the consent order are AvailBlue, Bridge Lending, Bright Star Cash, Cash Aisle, Evergreen Services, Makwa Finance, Lendgreen, Loan at Last, Lendumo, RadiantCash, Sky Trail Cash, and zFunds. All these entities operate under LDF Holdings, which is owned by the Lac du Flambeau Band of Lake Superior Chippewa Indians. While the lenders argued that their tribal status exempted them from state usury laws, the Attorney General’s Office successfully asserted that Minnesota law still applies, even when lenders are tribally owned.
A significant component of this consent order is the cancellation of all existing illegal loans made to Minnesota residents. For instance, a debt collector had already pursued collections for 308 Minnesota loans totaling over $302,000, successfully collecting over $174,000 before the investigation concluded. These loans, like many others under LDF Holdings, will now have their remaining balances reduced to zero, offering relief to Minnesota borrowers who were subject to predatory lending practices.
