Attorney General Josh Shapiro announces victories in cases against out-of-state car title lenders – AP Attorney General’s Office
Delaware-based CashPoint and its owner ordered to pay $8.5 million and cancel $3.2 million in outstanding loans
HARRISBURG — Attorney General Josh Shapiro today announced victories in two separate lawsuits involving Delaware-based car title lenders who provided loans to Pennsylvania residents. These victories will help provide financial relief to consumers and hold companies doing business in Pennsylvania to abide by state law.
State Court Victory vs. Dominion Management d/b/a CashPoint
The Philadelphia Court of Common Pleas issued a Judgement and Order requiring Dominion Management of Delaware, Inc. and Dominion Management Services, Inc., doing business as CashPoint, and their owner and Vice President Kevin Williams, to pay more than $8.5 million for having charged illegally high interest rates on car title loans.
“These defendants believed that because they were based in Delaware, they could speed up Pennsylvania laws and exploit consumers by charging illegally high interest rates,” Attorney General Josh Shapiro said. “With today’s judgment, the Court has held Kevin Williams accountable and sent a clear message that Pennsylvania usury laws apply to car title loans made to Pennsylvanians, regardless of the location of the lender.”
Of the $8.5 million, the court awarded $5.3 million in restitution to consumers, in addition to $3.2 million in penalties and $41,000 in costs. CashPoint and Williams were also ordered to cancel $3.2 million in outstanding loans and release all remaining liens on 800 vehicles. The Court also barred the defendants from participating in any business that provides loans to Pennsylvania residents, and prohibited them from selling, assigning, collecting or disclosing any information regarding the remaining loans.
the The Attorney General prosecuted CashPoint, Williams and another owner now deceased in October 2018. The Court found that CashPoint and Williams made more than 3,200 car title loans to Pennsylvanians and placed liens on their titled vehicles in Pennsylvania between 2013 and 2018. These loans were all well above the 6% interest rate limit for unlicensed lenders: most had annual interest rates above 200%, and some were above 360%.
The court found that the defendants violated the Unfair Trade Practices and Consumer Protection Act, the Interest and Loan Protection Act and two provisions of the Corrupt Organizations Act.
The Attorney General’s office has a related lawsuit against Kevin Williams’ brother and co-owner, Mark Williams, still pending in the Philadelphia Court of Common Pleas.
Federal Court Victory Against Delaware Auto Equity Loans
Separately, the Attorney General won a landmark court decision against another car title lender, Auto Equity Loans of Delaware, LLC (AEL), which had sued the Attorney General in an attempt to block an investigation into the protection of consumers.
Three years ago, the MPC opened an investigation into AEL. As part of the investigation, investigators sent a request for documents and data to Auto Equity. In response, Auto Equity sued OAG, asking a federal court to declare that since AEL claims it does not operate in Pennsylvania, the United States Constitution prohibits OAG from investigating AEL. .
After lengthy litigation by the OAG’s Civil Litigation Section, the U.S. District Court for the Intermediate District of Pennsylvania granted the OAG’s motion for judgment on the pleadings and fired AEL’s lawsuit, finding that “the Attorney General has the right to investigate and test plaintiff’s assertion that no part of the company’s loan transactions took place in Pennsylvania.”
The Court held that Auto Equity “presents no cogent authority that would preclude the Attorney General from investigating the scope and extent of its conduct” and that “it would be improper for the court to usurp the power of investigation by the Attorney General with a finding of civil facts and injunction at this stage.
The federal case was argued by Deputy Attorney General Alexander Korn, and the OAG’s investigation into AEL and the lawsuit against CashPoint and Williams is being led by Deputy Director of Consumer Financial Protection Nicholas Smyth.
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