McGraw settles case with South Dakota payday lender - WBOY.com: Clarksburg, Morgantown: News, Sports, Weather

McGraw settles case with South Dakota payday lender

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Attorney General Darrell McGraw recently announced the conclusion of a case where a Kanawha County circuit judge recently determined a payday lender was not a Native American tribe and was not entitled to tribal immunity.

The case was filed against South Dakota-based Payday Financial LLC, which conducted business as Lakota Cash, and its owner Martin A. Webb.

According to a news release from McGraw's office, Webb asserted the loans originated on the Cheyenne River Indian Reservation and was subject to tribal laws rather than West Virginia laws. 

After a court battle over the enforcement of McGraw's investigative subpoena, Kanawha County Circuit Judge Louis H. Bloom ruled that Payday Financial was not an Indian tribe and was governed by West Virginia laws.

The lender challenged the ruling by filing a petition for writ of prohibition with West Virginia's highest court. Justices let the ruling stand, however.

The news release states Payday Financial still did not comply with the subpoena, which put the case back in Kanawha County Circuit Court for contempt proceedings.

The day of the proceeding, Payday Financial and Webb signed an agreement with McGraw's office promising to permanently refrain from making internet payday or other usurious loans in West Virginia, the news release states.

It also agreed to pay $135,000, which will be distributed as full refunds of excess fees to 120 West Virginia consumers.

Payday also paid $5,000 to the state of West Virginia, which the news release states will be used for general consumer protection and other educational purposes.