The fight for fair lending got a big boost on August 31 when a federal court rejected a payday loan collector’s attempt to evade consumer laws. The decision against CashCall, a California-based online payday and installment lender upheld the Consumer Financial Protection Bureau’s authority to investigate and fine lenders for unfair, abusive or deceptive practices.

The court ruling is a key step in a legal battle that began nearly three years ago.

In December 2013 and for the first time, CFPB sued to secure consumer refunds of illegally collected money. According to the filing, “defendants engaged in unfair, deceptive and abusive practices, including illegally debiting consumer checking accounts for loans that were void.”

CFPB charged that California-based CashCall, its subsidiary WS Funding LLC, affiliate Delbert Services Corporation, a Nevada collection agency were all the same ownership. Loans ranging from $850- $10,000 were sold with upfront fees, lengthy repayment terms and interest rates as high as 343 percent. CFPB charged that these loan terms violated state laws in at least 16 states that had in place licensing requirements, interest rate caps—or both.

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