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DLLR News

 

Commissioner of Financial Regulation Orders Payday Lender to Cease and Desist

 

Marylanders are reminded to avoid paying usurious interest rates

BALTIMORE (June 3, 2009) – Department of Labor, Licensing and Regulation Secretary Thomas E. Perez announced that a cease and desist order has been issued by the Commissioner of Financial Regulation against a group of individuals and business entities who are alleged to have engaged in illegal and predatory payday lending in Maryland.

The Commissioner of Financial Regulation ordered Davis K. Ebo, Chijoke “Michael” Ebo, Toni McCullers-Ebo, Robert Thompson, Tierra Robinson and others, as well as their business entities, to stop making new consumer loans in Maryland and to stop collecting payments on loans previously made. The individuals were doing business under various names, including The Onyx Group, Onyx Stores, Cash Advance and Money Today.

The individuals involved in the case allegedly violated numerous provisions of Maryland’s Consumer Loan Law, notably they were unlicensed to make consumer loans, and they charged consumers usurious interest rates that were significantly higher than permitted by law. Further, they filed more than 1,500 confessed judgment complaints in various district courts, and in hundreds of instances were successful in obtaining confessed judgments against consumers and subsequently garnishing their wages. Confessed judgment clauses, which waive a consumer’s right to defend against a court action for non-payment, are illegal in all consumer transactions in Maryland. The cease and desist order is the result of an extensive investigation by Enforcement Unit investigators from the Office of the Commissioner of Financial Regulation.

“Once again we have shown that unscrupulous individuals who believe they can exploit unsuspecting consumers will be stopped,” Secretary Perez said. “We must remain particularly vigilant during times of economic distress, and I applaud the hard work of the investigators in the Enforcement Unit, and their commitment to protecting Marylanders.”

“Payday lenders charge exorbitant rates and fees for small loans, helping to drive hard working consumers into a vicious cycle of debt. To make matters worse, these individuals not only engaged in unlicensed and usurious lending, but they abused the court system to further victimize consumers. We have laws to protect Maryland consumers, and those laws will be enforced.” Deputy Commissioner Mark Kaufman said.

The individuals involved in the case have 30 days to request an administrative hearing. They face potential penalties and restitution of more than $2 million.