New York Attorney General Sues High-Interest Lender. [View all]

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New York State’s top prosecutor filed suit on Monday against an online lender that offers short-term loans at interest rates of more than 300 percent, the latest warning shot in a sweeping battle by state authorities to enforce local interest rate caps.

Eric T. Schneiderman, New York State’s attorney general, sued Western Sky Financial and its affiliates, which claim connections to American Indian tribes — ties that the lenders have argued immunize them from federal and state laws.

Visitors to Western Sky’s Web site are greeted by a logo of three teepees cast against a yellow sky. The lender, which says it operates “within the exterior boundaries of the Cheyenne River Sioux Reservation” in South Dakota, has argued that the tribal affiliation puts Western Sky beyond the reach of state regulators, including Mr. Schneiderman.

http://dealbook.nytimes.com/2013/08/12/new-york-attorney-general-sues-high-interest-lender/?hp