WASHINGTON — A rent-a-bank lender in the District will have to pay more than $215,000 to resolve allegations that it used predatory practices to deceive hundreds of residents.
D.C. Attorney General Brian Schwalb announced Wednesday that EasyPay Finance had deceived a large amount of residents into paying interest rates significantly above the District’s legally allowed maximum rate. In addition to the financial settlement, the lender must follow strict operational conditions going forward to ensure that the company no longer takes advantage of residents and complies with D.C.'s consumer protection laws.
“This investigation and settlement shuts down EasyPay’s practice of offering predatory loans at outrageously high interest rates to District borrowers,” said Schwalb said. “Using out-of-state banks as a cover to attempt to circumvent District laws, EasyPay charged customers exorbitant interest rates averaging 163% APR - roughly seven times higher than D.C.’s 24% limit - trapping consumers in cycles of debt that threatened to ruin their credit scores and financial security."
Schwalb said his office will continue to be aggressive when it comes to enforcing consumer protections.
EasyPay offered financing for purchases in D.C. through two locations. Through an investigation it was discovered that from 2018-2022, the lender preyed on customers by providing loans with an average Annual Percentage Rate (APR) of 163%, a minimum APR of 35.9%, and a maximum APR of 198.98%. This is well above the District’s usury cap of 24% per year.
As a result of OAG’s investigation and action, EasyPay must:
- Pay a total of $216,548.83 to provide full restitution to affected consumers and cover a payment to the District.
- $156,548.83 will be paid to affected consumers as restitution for the interest paid above D.C.’s cap; and
- $60,000 will be paid to the District.
- Not advertise or act as a service provider for loans or lines of credit to District consumers at an illegal rate.
- Facilitate permanent deletion from consumers’ credit reports of any negative credit information associated with the loans and lines of credit that it reported to credit bureaus.
- Not collect on loans where consumers are at least 60 days past due and will not sell these loans for collection by others.