Banking

Cascade Spring Credit Class Action for Alleged Predatory Loans

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Cascade Spring Credit Class Action for Alleged Predatory Loans

A new class action lawsuit has been filed against Cascade Spring Credit and its executives. The plaintiff, Chad Hohenbery, alleges that these defendants have been making usurious and illegal loans to Illinois residents through their online lending business, in violation of various Illinois and federal laws.

Are the Loans Really That Predatory?

The lawsuit alleges that the defendants have been making loans at exorbitant interest rates, far exceeding the limits set by Illinois law. The plaintiff himself claims he received a loan from Cascade Spring Credit with an annual percentage rate of 598.36%. These loans allegedly violate the Illinois Predatory Loan Prevention Act, which prohibits loans with an interest rate exceeding 36%, and the Illinois Interest Act, which sets an even lower limit of 9% for loans made by unlicensed lenders.

Not only are these loans alleged to be usurious, they are also claimed to be illegal. Under Illinois law, loans made by unlicensed lenders at more than 9% interest are void and unenforceable. Yet, the defendants are accused of not only making such loans, but also of using tribal immunity as a defense to evade liability for them.

What Happened to the Plaintiff?

According to the lawsuit, the plaintiff received a loan for personal purposes from Cascade Spring Credit. The loan was transferred to the plaintiff's bank account in Illinois via ACH, and was repaid through the same mechanism. The plaintiff alleges that the defendants' lending operations were conducted outside of tribal lands, and the majority of the transactions occurred in Illinois.

The plaintiff further alleges that the defendants, including Hill, Crandall, and Raines, are associated with the lending enterprise and conducted or participated in the affairs of the enterprise through a pattern of making and collecting unlawful loans.

Who Else Might Be Affected?

The plaintiff brings the lawsuit on behalf of a class consisting of individuals with Illinois addresses who received loans from Cascade Spring Credit at more than 9% interest or more than 36% interest, depending on the claim. The class is numerous, making a class action the superior method for the fair and efficient adjudication of the matter.

Given the allegations, it is likely that many Illinois residents who have taken out loans from Cascade Spring Credit may be affected by this case. The lawsuit seeks to represent all such individuals, and to hold the defendants accountable for their alleged actions.

How Much is at Stake?

The plaintiff is seeking statutory damages, compensatory damages, punitive damages, and attorney's fees. While the exact dollar amount is not stated in the complaint, it is likely to be in excess of five million dollars. The plaintiff also seeks other relief as deemed proper by the court, which could potentially increase the total amount at stake.

In addition to monetary damages, the plaintiff also demands that the defendants preserve all recordings, data, documents, and other tangible things related to the case. This could potentially lead to further evidence being uncovered, and could have significant implications for the outcome of the case.

What's Next?

As the case progresses, the court will need to determine whether the defendants' alleged actions indeed constitute violations of the Illinois Predatory Loan Prevention Act, the Illinois Interest Act, and the Illinois Consumer Fraud Act. The court will also need to determine whether the defendants qualify for tribal immunity, as they claim.

Regardless of the outcome, this case serves as a stark reminder of the potential pitfalls of online lending, and the importance of consumer protection laws in ensuring that borrowers are treated fairly.

Case Facts

  • Status:
    Lawsuit Filed
  • Case Number:
    1:23-cv-01236
  • Filing Date:
    June 22, 2023
  • Jurisdiction:
    U.S. District Courts
  • State:
    Illinois
  • Court:
    Illinois Central District
  • Plaintiff:
    Chad Hohenbery
  • Defendant:
    Cascade Spring Credit
  • Plaintiff Firm:
    Edelman, Combs, Latturner & Goodwin LLC
  • Defendant Firm:
  • Claims Administrator:
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