ACME, Mich.—Credit unions across the country should be watching member credit reports for loans from Western Sky in order to help those members file claims for refunds, according to this state’s regulator.
In remarks to the Michigan league’s annual meeting here, Patrick McPharlin, the former CU CEO who recently took over as director of the Department of Insurance and Financial Services, pointed to the $2.2-million settlement between Western Sky and Michigan’s Attorney General Bill Schuette in which the South Dakota-based company agreed to reduce interest rates on loans and refund overcharges.
Western Sky, a short-term lender that charged rates as high as 300% annually, has reached settlements with numerous states’ Attorneys General across the country. The multi-state settlement requires the company to reduce rates to 7%.
In Michigan, McPharlin, the former CEO of the $2.9-billion MSU FCU in East Lansing, said, “This is thousands and thousands and thousands of dollars that can be refunded.”
According to reports, as many as 17,500 Michigan residents could be eligible for refunds from Western Sky because the company exceeded the state’s maximum interest rate rule.
McPharlin said MSUFCU found that some of its members with high credit scores had loans through Western Sky, indicating that poor people weren’t the only victims.
Credit unions across the country should be watching member credit reports for loans from Western Sky in order to help those members file claims for refunds, according to this state’s regulator.