WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that EasyPay Finance (EasyPay), a rent-a-bank lender that had operated in the District, will pay more than $215,000 to resolve allegations that it used predatory practices to deceive hundreds of District residents into paying interest rates significantly above DC’s legally allowed maximum rate. In addition to financial terms, EasyPay must follow strict operational conditions going forward to ensure that the company no longer takes advantage of District consumers and complies with District 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 AG Schwalb. “Using out-of-state banks as a cover to attempt to circumvent District laws, EasyPay charged customers exorbitant interest rates averaging 163% APR - roughly 7 times higher than DC’s 24% limit - trapping consumers in cycles of debt that threatened to ruin their credit scores and financial security. My office will continue to aggressively enforce DC’s consumer protections to the fullest extent of the law and will pursue every avenue to prevent out-of-state lenders from evading the District’s interest rate cap.”
EasyPay operated as a rent-a-bank lender offering financing for purchases in DC through two District locations. An investigation by the Office of the Attorney General (OAG) found that from 2018-2022, EasyPay preyed on hundreds of District consumers 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% - well above the District’s usury cap of 24%. District law sets the maximum interest rates that lenders can charge in their written contracts at 24% per year. Violations of these limits are illegal under the Consumer Protection Procedures Act (CPPA), which prohibits a broad range of deceptive and unfair business practices.
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 DC’s cap of 24%; and
- $60,000 will be paid to the District.
- Stop using out-of-state banks to charge rates above the District’s legal cap. EasyPay will not advertise or act as a service provider for loans or lines of credit to District consumers at an illegal rate.
- Delete negative credit reporting. EasyPay will 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.
- Cease collection on defaulted loans. EasyPay will not collect on loans where consumers are at least 60 days past due and will not sell these loans for collection by others.
The full settlement agreement is available here.
This matter was handled by Senior Assistant Attorney General Wendy Weinberg and Assistant Attorney General Margaret Ulle, under the supervision of Adam Teitelbaum, Director of the Office of Consumer Protection.
OAG’s Efforts to Combat Predatory Lending
This settlement builds on OAG’s work to hold predatory lenders accountable. In particular, OAG has become a national leader in combatting “rent-a-bank” schemes. In May 2023, AG Schwalb secured a precedent-setting settlement with SoLo Funds, an online fin-tech lender that deceived consumers about the true cost of the loans on its platform and facilitated loans with an average APR of 500%. In February 2022, OAG secured nearly $4 million from Elevate Credit, Inc. to refund over 2,500 District consumers who misleadingly marketed high-cost loans and lines of credit. In November 2021, OAG announced an over $2 million settlement with Opportunity Financial, LLC, a predatory online lender that provided deceptive loans to over 4,000 District consumers and charged interest rates seven times greater than the District’s rate cap. In January 2021, OAG joined a multistate lawsuit against the Trump administration’s True Lender Rule, which made it easier for lenders to bypass state interest rate caps. In August 2020, OAG joined a coalition of attorneys general in filing suit against the Federal Deposit Insurance Corporation (FDIC) for issuing a rule that would dramatically expand preemption of state interest rate caps to non-bank entities. Previously, OAG led a coalition of 14 states urging the FDIC to protect borrowers from abusive lending practices. OAG also secured more than $3 million in refunds and debt forgiveness for District residents through a lawsuit against another exploitative lender that attempted to circumvent DC law.
How to Report Illegal or Unfair Business Practices
To report unfair business practices, scams, or fraud, you can submit a consumer complaint to OAG by:
- Texting “COMPLAINT” to 202-738-5212 and following the prompts
- Messaging OAG using the chat feature at: oag.dc.gov/consumer
- Submitting a complaint online at: https://oag.dc.gov/consumer-protection/submit-consumer-complaint
- Calling (202) 442-9828
- Emailing firstname.lastname@example.org