An Internet payday lender charging Minnesotans interest rates as high as 1,369 percent has been ordered to pay nearly $8 million for operating in the state without a license.
Ramsey County District Judge Margaret Marrinan issued the ruling Friday against Integrity Advance LLC, granting a motion for summary judgment by Minnesota Attorney General Lori Swanson.
Integrity Advance is one of eight online payday lenders that Swanson sued in recent years as part of a crackdown on unlicensed online lenders making loans to Minnesotans. The state reached settlements or default judgments with the other seven short-term lenders; Integrity is the last and the award is the largest of the cases.
"Unlicensed payday lenders, which willfully skirt Minnesota law, hurt consumers by charging outrageous interest rates," Swanson said in a statement. "We hope that today's court ruling, together with our previous lawsuits, will make others think twice."
Executives at Integrity Advance, based in Newark, Del., could not be reached Friday for comment.
In an interview, Marrinan said the state originally sought a smaller amount from Integrity. She said she pursued the higher figure due to the sheer number of loans the company made in Minnesota, the fact that it was targeting the most financially vulnerable people and because the company lied to authorities about its lending.
Not only was Integrity not licensed to do business in Minnesota and charging usurious interest rates, Marrinan said, but when complaints surfaced in 2010 and authorities questioned the company about its Minnesota operations, it denied it did any business in the state.
The company later conceded that it made 1,269 loans to Minnesotans. It also routinely e-mailed Minnesota borrowers who had paid off their loans to take out new ones, and called them at their homes and at work.
