Feds: Tribe-owned online lenders collected on invalid debts

Markets Associated Press

Federal regulators sued four online lenders for collecting consumer debts they weren't legally owed, an area that is a prime source of consumer complaints.

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The Consumer Financial Protection Bureau filed the suit Thursday against the lenders, saying they illegally took money from consumers' bank accounts for debts that weren't valid. It says the high-cost online loans violated licensing requirements or interest-rate caps, or both, making them void in at least 17 states.

The four lenders, Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial, are owned by the Habematolel Pomo Tribe, an American Indian tribe in northern California. The tribe disputed the allegations and said it would fight the suit.