On February 10, 2023, the Massachusetts Division of Banks (DOB) announced that it entered into a consent order with an online loan servicer headquartered in Chicago, Illinois. The order resolves allegations that the company “engaged in the business of a small loan company from at least August 1, 2016 through May 31, 2019 in Masschusetts without the appropriate license,” in violation of M.G.L. Chapter 140, Sections 96 through 114A, which requires an entity to be licensed by the Commissioner if they are engaged in the business of making loans of $6,000 or less and the interest and expenses paid on the loan exceed in the aggregate 12 percent, or engaged in the buying or endorsing of notes or the furnishing of guarantee or security for compensation.
As part of the settlement, the company agreed to pay an administrative penalty of $555,000 to the Division. In addition, the company must conduct a portfolio review of loans made in Massachusetts, and reimburse consumers for any that violate M.G.L. 140.