"Payday" Lender Settles Contempt Charges with Colorado Attorney General

Denver--Attorney General Ken Salazar announced today that a “payday” lender has paid a $30,000 penalty to resolve contempt charges his office brought against the lender. The lender, Easy Money of New Mexico, Inc. (Easy Money), and its principals, also agreed not to engage in “payday” lending in Colorado without first obtaining a license to do so.

"This is an important settlement, because it signals that all payday lenders making loans to Colorado residents must comply with Colorado law. If they do not, they will suffer the consequences," Attorney General Salazar said.

In March 2002, the Administrator of the Uniform Consumer Credit Code, an agency within the Attorney General’s office that regulates “payday” lenders, received information that Easy Money was making “payday” loans in Colorado. Easy Money was not licensed to make such loans. The Administrator issued a subpoena to Easy Money to produce records of all “payday” loans made to Colorado residents. Easy Money did not comply with the subpoena, and the Administrator sought and obtained an order from the Denver District Court enforcing the subpoena. The Administrator then brought contempt proceedings because Easy Money did not produce the records in accordance with the Denver court’s order. Subsequently, Easy Money produced various records, representing loans it made to approximately 130 Colorado consumers primarily between March 2002 and July 2002.

As part of the settlement of the contempt proceedings and the underlying issues of its unlicensed loan making, Easy Money agreed to pay a $30,000 penalty. The agreement was entered into in May 2003 and the final payment was received the first week of June. The money will be used to make appropriate refunds to those consumers identified in the loan records Easy Money provided, and for consumer and creditor educational purposes.

"Payday" loans are consumer loans of up to $500 that may be obtained quickly and conveniently but must be repaid within forty days or less. Colorado law allows payday lenders to charge high interest rates for these transactions, which can be as much as a 500% annual percentage rate. They are intended for occasional unexpected bills or emergencies.

Consumers who have questions about the settlement can contact the Attorney General’s Office at 303-866-4494.