A Kanawha County Circuit Court judge has ordered 10 Internetpayday lenders to produce documents subpoenaed by state AttorneyGeneral Darrell McGraw's office.
Judge Paul Zakaib also ordered the lenders to stop making orcollecting payday loans in West Virginia until further notice.
Payday loans are short-term loans or cash advances, typically for14 days, with high interest rates. Internet payday loans are securedby the consumer giving the lender permission to electronically debitthe full amount owed, plus interest, from a personal checkingaccount.
McGraw's Consumer Protection Division began investigating theseloan practices in 2005 after hearing that some companies weresidestepping West Virginia usury laws by providing loans online.
Agency officials say in some cases, consumers were charged annualpercentage rates ranging from 600 percent to 800 percent, which ismore than 44 times the maximum allowable rate of 18 percent APR forsimilar consumer loans in West Virginia.
Since the office began its investigation, it has reachedsettlement agreements with at least 17 Internet payday lenders.Agency officials say these settlements have resulted in $225,000 inrefunds and canceled debts for more than 1,600 West Virginiaconsumers.
Assistant Attorney General Norman Googel said Zakaib granted theAttorney General's petition in February, but there was a delay ingetting it entered in writing.
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