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Illinois Attorney General Lisa Madigan uses Dodd-Frank Act to sue Chicago-area lender

washingtonexaminer.com | March 23, 2014

CHICAGO (Legal Newsline) – Illinois Attorney General Lisa Madigan filed a lawsuit on Wednesday against a Chicago-area short-term lender that allegedly sold a loan meant to evade state reforms.

CMK Investments Inc., doing business as All Credit Lenders, sells small consumer loans and lines of credit through its storefronts in Illinois, South Carolina and Wisconsin. All Credit Lenders allegedly evaded Illinois’ 36 percent interest rate cap by offering a short-term loan product that works like a revolving line of credit but offers none of the protections of a credit card.

While All Credit Lenders allegedly offers the credit card-like products with advertised interest rates of 18 to 24 percent, the account protection fees the company charges raises the interest rates to between 375 percent and more than 500 percent.

Madigan’s lawsuit alleges that when All Credit Lenders borrowers only pay the minimum payment, none of the payment goes toward the principal of the loan. The minimum payments allegedly only cover the bi-weekly fees charged to consumers.

“This new loan product is one of the most abusive attempts to evade the reform laws we have seen,” Madigan said. “This company provides consumers repayment schedules where not one penny of their payment goes toward paying down the principal balance, making it impossible to pay off their loan.”

Madigan’s lawsuit alleges violations of the Illinois Consumer Fraud and Deceptive Business Practice Act. It is the first action Madigan’s office has taken under the new federal Dodd-Frank Act. The suit seeks to ban All Credit Lenders from selling lines of credit and revolving credit in the state, assess penalties for the alleged violations and provide restitution to all impacted consumers.

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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