Western Sky is not licensed in Michigan and has charged interest rates of more than 340 percent. Michigan’s maximum rate is 7 percent or 25 percent; depending on the type of lender. DIFS said Western Sky also charges fees up to 70 percent of the loan amount — 14 times the legal limit.
The Michigan Department of Financial Institutions suggests that a borrower of $2,600 from Western Sky could pay more than $14,000 in principal and interest over the life of the loan.
“DIFS advises consumers to only conduct business with entities that are properly licensed,” Director Kevin Clinton said in a statement. “Through our investigation, it became clear this company is not complying with state laws that were put in place to protect consumers and is taking advantage of Michigan residents.”
Oregon, Colorado and Washington have issued complaints or fines against Weastern Sky, owned by Martin Webb, a member of the Cheyenne River Sioux Tribe.
Webb is the target of a Federal Trade Commission lawsuit that claims his companies forced customers from throughout the country to appear before a tribal court in South Dakota that didn’t have jurisdiction over the cases.