Press Statement  ATTORNEY GENERAL CAMPBELL REACHES SETTLEMENT WITH EASYPAY OVER ALLEGED RENT-A-BANK SCHEME, SECURES RESTITUTION AND CEASES LENDING IN THE COMMONWEALTH

Boston — Attorney General Andrea Joy Campbell has reached an assurance of discontinuance (AOD) with EasyPay, which made predatory loans to Massachusetts consumers by laundering loans through a bank not subject to Massachusetts’ protections.

Under the AOD, EasyPay will stop making loans in the Commonwealth and will provide considerable consumer relief, including $625,000 in restitution to Massachusetts consumers who paid exorbitant interest rates which averaged above 100% annual percentage rate (APR). As part EasyPay will also cease collection on all active and defaulted loans in the Commonwealth.

“I am grateful for my team’s leadership on this matter and taking on predatory lenders who use illegal practices to prey on our most vulnerable residents leaving them with significant debt,” said AG Campbell. “We will continue to combat predatory lending in its many forms so that all Massachusetts residents have an opportunity to actually grow wealth.”  

The AGO’s investigation found that since 2018, EasyPay has issued numerous loans in the Commonwealth with interest rates that uniformly exceeded Massachusetts’ interest rate limits. The average APR on these loans was over 100%. The Attorney General’s Office alleges that Easypay made these usurious loans as part of a “rent-a-bank” scheme wherein it partnered with an out-of-state bank in an effort to circumvent the Commonwealth’s interest rate limits.

Rent-a-bank schemes are one of the many ways that predatory lenders seek to evade the Commonwealth’s laws. In a rent-a bank scheme, the non-bank lender tries to launder its loan through an out-of-state bank that is not subject to the state’s interest limits. The lender is, in effect, seeking to unlawfully “rent” the bank’s charter at the precise moment when it issues the loan. 

Today’s settlement is part of AG Campbell’s efforts to combat predatory lending practices which disproportionately harm low-income consumers and communities of color. As outlined in her strategic plan, a priority of AG Campbell is protecting Massachusetts consumers from exploitation, unfair, and deceptive business practices especially in low-income communities where such practices historically have been targeted. Earlier this month, AG Campbell secured $80 million for Massachusetts student loan borrowers. Last year, AG Campbell announced a settlement with Rent-A-Center for exploiting low-income communities and communities of color and subjecting consumers to aggressive and unlawful debt collection practices.

This matter was handled by Division Chief Yael Shavit and Paralegal Matt Jelen, both of the AG’s Consumer Protection Division. 

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