Arbitration clause in tribal lender’s payday loans unenforceable

Source: Bernie Pazanowski, Reuters (Paid Registration)

The arbitration clause in a tribal lender’s payday loans impermissibly strips borrowers of their right to pursue statutory claims and is therefore unenforceable, the Third Circuit said Tuesday.

Plaintiffs Christina Williams and Michael Stermel obtained payday loans from AWL Inc., an online entity owned by the Otoe-Missouria Tribe of Indians. They claimed AWL’s lending practices, which included charging annual interest rates between 496.55% to 714.88%, violated the Racketeer Influenced and Corrupt Organizations Act and Pennsylvania consumer protection laws...

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