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Minnesota Commerce Department and Attorney General reach $4.5 million settlement with California company over illegal, high-interest online loans

8/18/2016 9:57:10 AM

SAINT PAUL – Minnesota Commerce Commissioner Mike Rothman announced today that his department and the Minnesota Attorney General have reached a sweeping $4.5 million settlement with a California-based internet payday lending company that victimized thousands of Minnesotans with illegal, high-interest loans.

The settlement is with CashCall Inc., its affiliated companies and owner J. Paul Reddam. 

“For Minnesotans who were victimized by CashCall, this settlement will cancel their debts on these predatory loans and provide restitution for the excessive interest and fees they already paid,” said Rothman, whose agency licenses and regulates businesses that make consumer loans in the state. “We are committed to protecting consumers and cracking down on illegal, deceptive lending practices that prey on vulnerable Minnesotans.”

CashCall financed high-interest, quick-approval payday loans to consumers via the internet. It tried to evade state consumer protections by improperly invoking tribal sovereign immunity and doing business through a front company, Western Sky Financial, a company created with ownership by a man who was a member of the Cheyenne River Sioux Tribe in South Dakota. However, the actual tribe had no affiliation with the business.

The Minnesota Commerce Department and Attorney General jointly filed a lawsuit against CashCall, alleging that the company engaged in unlicensed lending in Minnesota, falsely claimed tribal affiliation to circumvent state laws and illegally charged annual interest rates as high as 342 percent.

Under the terms of the consent judgment and order filed in Hennepin County District Court, CashCall is required to:

  • Pay a $4.5 million settlement that will be used for restitution to Minnesota consumers who paid interest and fees on Western Sky loans in excess of what state law allows.  
  • Stop collecting payments on all loans issued by Western Sky, and stop the sale or transfer of Western Sky loans to any third parties.
  • Cancel any current debts on loans issued by Western Sky to Minnesota consumers.
  • Send a notice to inform every Minnesota consumer with a loan issued by Western Sky that the loan is canceled, with no further payments due.
  • Notify credit reporting agencies to withdraw all reports submitted by the company on Minnesota consumers.
  • Notify all third parties that bought or acquired Western Sky loans that these loans are canceled. 
  • Provide a full, detailed list of all loans issued by Western Sky, which will be used to determine restitution payments to Minnesota consumers.

The company, its affiliated companies and owner Reddam are also prohibited from consumer lending in Minnesota unless they are properly licensed and comply with state laws.

“Payday loan companies, whether online or on the corner, need to be licensed and follow the lending laws that protect Minnesota consumers from excessive interest and fees,” said Rothman. “Unlicensed lenders are a continuing problem as they prey on consumers who may be in difficult financial straits and turn to payday loan websites to get fast cash.”

He encourages Minnesota consumers to protect themselves by checking with the Commerce Department before doing business with an online payday lender to confirm that it is licensed by the state. A License Lookup tool is available on the department’s website.

Commerce is here to help

If you have a question or concern about a possible scam or fraud, contact the Minnesota Commerce Department’s Consumer Services Center by email at or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

Media Contact:
Ross Corson
Director of Communications
Minnesota Department of Commerce
P: 651-539-1463 | C: 651-368-5050 |


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