Just a few of the states piling on top of Western Sky, Cash Call and their servicers: New York, Georgia, Minnesota, and Virginia, Colorado, North Carolina and New Hampshire.

N.C. Attorney General Cooper and the North Carolina Office of the Commissioner of Banks filed against Western Sky Financial, CashCall, their owner John Paul Reddam for violating North Carolina laws that ban egregious interest rates on small consumer loans.

Payday and other high interest rate loans are against the law in North Carolina. N.C. regulators have fought to shut down storefront lenders. The last storefront payday lenders were forced from the state in 2006, but lenders outside of North Carolina continue to try to reach North Carolina consumers through the Internet and advertising.

The N.C. lawsuit requests the court cancel the illegal loans, order refunds for consumers, and ban the defendants from collecting on the loans and making any future illegal loans to North Carolina consumers.

Colorado AG filed suit against the same lendr, loan servicers and collection company.

The New Hampshire AG promised to enforce a state banking department order against the same entities targeted in the other state actions.

All three actions state actions are in coordination with a CFPB action filed December 16 suggesting a broad pursuit of purported “regulatory-evasion schemes.” The states are alleging that the lender violated state usury or licensing laws in the online origination of short-term, small dollar loans. The lender asserts that it is a Native American sovereign entity not subject to relevant state laws. The states also allege that a “servicer, either in its own name or through a related entity, provided the lender with marketing, web hosting and customer services, collected consumer information, and conducted the loans’ initial underwriting review, and then purchased all loans immediately after origination.” “The states further allege that either the servicers or a related debt collection company engaged in servicing and collections, and that the totality of the activities violated state lending and licensing laws by, among other things, financing and collecting on illegal payday loans.”

The state AG suits are similar to suits previously filed by other state attorneys general, including in New York, Georgia, Minnesota, and Virginia.