The Attorney General of Washington, D.C., has filed suit against an online lender for allegedly charging interest rates at 42 times the allowed limit in the District and for not being a licensed lender.
A copy of the complaint, filed in Superior Court of the District of Columbia, can be accessed by clicking here.
The lender, Elevate, has two loan products. One carries an interest rate of 149% and the other has an interest rate of 251%, according to the complaint. Washington, D.C., has established interest rate caps of 24% for loans provided by a licensed lender with a rate stated in the contract, and 6% for loans provided by licensed lenders that do not state an interest rate in the contract. The Attorney General accused the lender of making more than 2,500 loans to individuals in Washington, D.C. that violated the rate caps.
“District law sets maximum interest rates that lenders can charge to protect residents from falling prey to unscrupulous, exploitative lenders,” said AG Karl Racine, in a statement. “Elevate misrepresented the nature of their loans — which had interest rates that ran up to 42 times over the District’s interest caps. By actively encouraging and participating in making loans at illegally high interest rates, Elevate unlawfully burdened over 2,500 financially vulnerable District residents with millions of dollars of debt. We’re suing to protect DC residents from being on the hook for these illegal loans and to ensure that Elevate permanently ceases its business activities in the District.”
The lender allegedly originated the loans in Washington, D.C., going back as far as 2014 before it received a cease-and-desist letter from the Attorney General earlier this year.
The Attorney General charged the lender with several counts of violating Washington, D.C.’s Consumer Protection Procedures Act.