One of the top online lenders, Western Sky which offers short-term loans online with high interest rates, indicated that they will stop lending on Sept. 3. This is coming from the legal battles with officials in several states, including Maryland.
The reason behind Western Sky’s decision comes from federal and state regulators clamping down on payday lending. Regulators would like to stop Americans from becoming trapped in a vicious cycle of these high interest loans.
Western Sky did not respond to a request for comment, however the company has placed on their website that they will no longer provide loans September 3rd.
The company operates on the tribe’s South Dakota reservation. Western Sky felt that since it operated on a reservation, they were exempt from state laws. Now they are finding themselves in hot water, and are forced to stop lending to states that have strict usury laws.
New York sued the company because they offered loans that went over the states usury rate. Oregon, Colorado, Minnesota and Maryland has also taken action against the company.
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