EasyPay Finance to Pay $215,000 Penalty for Ripping Off DC Consumers

Auto repair finance company charged interest rates of 163%, violating DC law

The District of Columbia's Attorney General, Brian Schwalb, announced that his office is ordering auto repair finance company EasyPay to pay a $215,000 penalty as a result of that company's predatory and illegal lending in DC.

“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.”

$156,000 of the settlement will be paid to consumers who were harmed by the triple-digit interest rates and another $60,000 will be paid as a civil penalty to the District.

Consumer advocates were quick to applaud DC's efforts to rein in EasyPay and to put a stop to so-called "rent-a-bank" schemes that allow predatory lenders to evade state and local interest rate caps on small-dollar loans. In the case of EasyPay, Transportation Alliance Bank (TAB) out of Utah was the partner bank involved.

“TAB Bank has been fronting for EasyPay Finance to facilitate predatory puppy loans, auto repair loans, and furniture loans using deceptive and unlawful tactics leading to astronomical interest rates up to 189% in violation of interest rate laws,” said Lauren Saunders, associate director of the National Consumer Law Center. “DC’s latest action against EasyPay and earlier lawsuits against OppFi and Elevate have sent a message and pushed predatory rent-a-bank lenders out of DC, showing how states can take a stand to protect their interest rate laws against evasions.” 

Photo byOmri D. CohenonUnsplash