Banking and Finance Law Daily Former ‘Think Finance’ CEO, National Credit Adjusters, settle Pennsylvania AG’s action
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Monday, April 12, 2021

Former ‘Think Finance’ CEO, National Credit Adjusters, settle Pennsylvania AG’s action

By Thomas G. Wolfe, J.D.

The respective settlements effectively end the allegedly unlawful payday lending scheme that "targeted as many as 80,000 Pennsylvania consumers" for approximately $133 million.

Kenneth Rees, the former CEO of online lender Think Finance, Inc., and its debt collector, National Credit Adjusters, LLC (NCA), have separately agreed to settle charges brought against them by the Pennsylvania Attorney General, Josh Shapiro, for their respective roles in an allegedly unlawful payday lending scheme that "targeted as many as 80,000 Pennsylvania consumers" for approximately $133 million. Combined with prior settlements with Think Finance and others, the Pennsylvania AG’s stipulated settlement and consent decree with defendant Rees and the consent petition for a final decree with defendant NCA effectively end the enforcement action. Under the terms of the pertinent settlement agreements, in addition to injunctive and other affirmative relief, Rees is required to pay $3 million and NCA is required to pay $878,523 in monetary relief. In resolving the Pennsylvania AG’s charges, neither Rees nor NCA admits any wrongdoing, and each defendant denies the claims brought against them (Commonwealth of Pennsylvania v. Think Finance, Inc., E.D. Pa., Case No. 14-cv-07I39-JCJ).

In late 2014, the Pennsylvania Office of the Attorney General sued Think Finance, Rees, and NCA as well as other defendants. The Pennsylvania AG’s action alleged that "between 2011-2014, three websites operated by Think Finance—Plain Green Loans, Great Plains Lending and Mobiloans—signed borrowers up for loans and lines of credit while charging effective interest rates as high as 448 percent," which purportedly violated Pennsylvania state laws governing usury and payday lending. The lawsuit also alleged that the websites attempted to shield themselves from state and federal laws by operating under the guise of Native American tribes and a federally chartered bank—with a loan product called ‘ThinkCash.’" Moreover, NCA "allegedly collected more than $4 million on more than 6,000 consumer loan accounts of Pennsylvania consumers" in violation of applicable laws.

In July 2019, Pennsylvania AG Josh Shapiro reached a settlement with Think Finance and an associated private equity firm that operated to "void all remaining balances on the illegal loans." The settlement also tied into part of Think Finance’s bankruptcy plan.

NCA settlement. In addition to $878,523 in monetary relief required by defendant NCA under the terms of the order and consent petition for a final decree, the debt collection company not only will ensure that all debts it acquires (and attempts to collect) comply with applicable laws and regulations, but also will ensure that it will:

  • cancel all pertinent balances and will take no further action to collect debts "allegedly owed by Pennsylvania consumers on Think Finance debts;"
  • notify each Pennsylvania consumer debtor alleged to have owed monies under a Pennsylvania account that the balances have been cancelled;
  • refrain from engaging in collections "on any debts involving loans made over the Internet by non-bank lenders that violate Pennsylvania laws, including its usury laws;" and
  • not sell, resell, or assign debt related to the Pennsylvania accounts, "including those subject to a previously-negotiated nationwide class action settlement agreement and Chapter 11 bankruptcy plan."

Rees settlement. In addition to $3 million in monetary relief required by defendant Rees under the terms of the stipulated settlement and consent decree, the former CEO of Think Finance must comply with all pertinent consumer-protection laws. Further, Rees also agrees that, for nine years, he will not: "provide capital to a third party to originate consumer loans to Pennsylvania residents; be employed by a third party; or provide services to a third party, if the third-party (a) makes or offers a consumer credit product to Pennsylvania consumers, or (b) brokers, markets, purchases a participation interest in, collects or services a consumer credit product made or offered to Pennsylvania consumers unless Rees believes that such consumer credit product or service complies with Pennsylvania law, including its usury laws."

According to the Pennsylvania AG’s April 9, 2021, release, the NCA and Rees settlements have been approved by the U.S. District Court for the Eastern District of Pennsylvania.

Attorneys: Richard L. Scheff (Armstrong Teasdale LLP) for Kenneth Rees. Mark Fletchall for National Credit Adjusters, LLC. Josh Shapiro, Michelle A. Henry, James A. Donahue III, Saverio P. Mirarchi, Sarah A. E. Frasch, and John M. Abel for the Commonweatlth of Pennsylvania.

Companies: National Credit Adjusters, LLC; Think Finance, Inc.

MainStory: TopStory ConsumerCredit DebtCollection EnforcementActions InterestUsury Loans PennsylvaniaNews StateBankingLaws

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