All articles tagged with #predatory lending
Tom Dundon, the buyer of the Portland Trail Blazers, built his fortune through subprime auto loans and predatory lending practices, which have led to legal investigations and concerns about his suitability as an NBA owner, especially given his controversial financial history and its potential impact on public funding for a new arena in Portland.
New York Attorney General Letitia James has filed a lawsuit against Yellowstone Capital and related companies, alleging that they exploited struggling small businesses by issuing fraudulent loans at interest rates as high as 820%. The operation, which allegedly rebranded as Delta Bridge, continued issuing illegal loans disguised as merchant cash advances, resulting in severe financial challenges for the affected businesses. James is seeking at least $1.4 billion for the impacted small businesses and is also asking for a court order to bar the companies and their affiliates from continuing the operation.
New York Attorney General Letitia James has filed a lawsuit against over 30 companies and individuals, including Yellowstone Capital and its founder David Glass, for exploiting small businesses through fraudulent loans disguised as merchant cash advances. The lawsuit seeks at least $1.4 billion in interest and fraudulent fees collected from small businesses and a court order to stop the illegal activities. The companies allegedly operated a predatory lending scheme through various aliases, issuing short-term, high-interest funding with ultra-high interest rates of up to 820% per year. The lawsuit aims to return all illegally obtained amounts and bar the companies and individuals from continuing their scheme in the future.
The Justice Department has filed a lawsuit against a Texas developer, Colony Ridge, alleging that the company targeted Hispanic residents by selling them subpar, unfinished homes with hidden costs in hopes of reselling the properties after the buyers defaulted. The developer, which also provided home-financing loans, allegedly exploited language barriers and used misleading ads on platforms like TikTok to trap buyers into purchasing unfinished properties. Many of the homes were in flood-prone areas, forcing buyers to spend additional money. Nearly 1 in 4 Colony Ridge homeowners ended up in foreclosure, with a default rate over 10 times the national average. The lawsuit seeks compensation for victims of the scheme.
The Biden administration has filed a lawsuit against Colony Ridge, a housing developer in Texas, accusing them of predatory lending and dishonest sales practices that targeted predominantly Hispanic buyers. Federal prosecutors allege that Colony Ridge illegally targeted and pressured Hispanic buyers with little or no credit, offered financing without verifying the ability to pay, charged excessive interest rates, and misrepresented properties in their marketing materials. The development, which attracted attention for attracting undocumented migrants, has faced criticism from both Texas Republicans and local residents for straining local resources and causing damage to roads, flooding, and crime. Colony Ridge denies the allegations.
Federal authorities have filed a lawsuit against Houston-area developer Colony Ridge, accusing it of targeting Latino homebuyers with seller-financed mortgages and setting them up for foreclosure. The alleged scheme involved misleading advertisements, high-pressure sales tactics, minimal down payments, and loans extended without assessing the buyer's ability to repay. The company also misrepresented facts about essential services, leading to unexpected expenses for borrowers. Roughly one-in-four Colony Ridge loans ends in foreclosure. The government is seeking injunctive relief, compensation for affected consumers, and penalties against the developer for violating federal laws. Colony Ridge denies the allegations and claims to have a positive relationship with customers.
The U.S. Department of Justice (DOJ) has filed a lawsuit against Houston-area developer Colony Ridge, accusing them of using fraudulent lending practices to target Latino buyers with false statements and predatory loans in rural Liberty County. The lawsuit alleges that Colony Ridge misled borrowers about infrastructure and exploited language barriers by conducting most of its marketing in Spanish while providing important transaction documents only in English. The federal government is seeking to halt these practices, provide relief for those harmed, and impose a civil penalty on the developers. Colony Ridge's CEO denies the allegations, stating that the lawsuit is baseless. The lawsuit highlights an unusually high foreclosure rate and the loss of the American Dream for many homeowners.
Donald Trump's last-minute pardon of Jonathan Braun, a convicted drug smuggler with ties to the Kushner family, disrupted a larger investigation by the Justice Department into the predatory lending industry. The DOJ had been working on a deal with Braun to cooperate in their probe, but his pardon eliminated their leverage. Braun, who had been serving a 10-year sentence for money laundering and running a marijuana smuggling ring, was involved in a predatory lending operation while under house arrest. His connection to the Kushner family may have played a role in securing his pardon.
Former President Donald Trump's last-minute pardon of loan shark Jonathan Braun undermined a federal investigation into predatory lenders in the merchant cash advance industry. Prosecutors were negotiating with Braun for his cooperation in exchange for his release, but Trump's pardon eliminated their leverage. Braun, who had been convicted of running a marijuana ring, had ties to the family of Trump's son-in-law, Jared Kushner. The pardon also raised questions about the Kushners' involvement in securing Braun's release. Federal investigators were furious about Trump's interference, and Braun maintains his innocence. Trump has expressed intentions to issue more pardons if he becomes president again.
The commutation of Jonathan Braun's sentence by former President Donald Trump is raising questions about how Trump used his clemency powers and what he could do in a second term. Braun, a convicted drug smuggler and predatory lender, returned to his illegal activities shortly after his release. The commutation also hindered a criminal investigation into the predatory lending industry. Braun's family used their connection to Charles Kushner, father of Jared Kushner, to seek Trump's intervention. The lack of rigorous vetting and the sidelining of the Justice Department in the clemency process were major problems in the Trump White House.
Predatory lending in the student loan industry is not limited to for-profit schools. Some highly regarded universities are licensing their name to for-profit schools, allowing them to outsource the entire education process. The Biden administration has discharged almost $73 billion in student loan debt for over 2.5 million borrowers, including those who attended for-profit or formerly for-profit schools. However, a lawsuit is seeking to prevent the Department of Education from discharging debt for defrauded borrowers using the borrower's defense discharge.
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Heights Finance Holding Company, a high-cost installment lender, and its subsidiaries for engaging in illegal loan-churning practices that resulted in hundreds of millions of dollars in loan costs and fees. The CFPB alleges that the company targeted struggling borrowers and aggressively pushed them to refinance, trapping them in a cycle of debt. The lawsuit seeks to end these practices, provide redress to affected consumers, and impose civil penalties.
Indian edtech giant Byju's has filed a complaint in the New York Supreme Court against Redwood, alleging predatory tactics and challenging the acceleration of the $1.2 billion term loan B. Byju's said it will not make any payments to the term loan B lenders until the dispute is resolved. The move follows lenders "unlawfully" accelerating the term of the loans on the account of "certain alleged non-monetary and technical defaults," the company said.
Google will prohibit personal loan apps from accessing sensitive user data such as photos, videos, and contacts, as part of its response to the rise of predatory behavior from some lenders that harass borrowers. The change will come into effect from May 31. The Android maker has been criticized in the past for not taking strong measures against predatory loan apps and has introduced policy updates in markets including India, Indonesia, Nigeria, Kenya, and the Philippines.