Delaware-based CashPoint and its owner ordered to pay $8.5 million and cancel $3.2 million in outstanding loans
HARRISBURG — Attorney General Josh Shapiro today announced victories in two separate lawsuits involving Delaware-based car title lenders that were making loans to Pennsylvania residents. These victories will help provide financial relief to consumers and hold companies that do business in Pennsylvania accountable to state law.
State Court Victory Against Dominion Management d/b/a CashPoint
The Philadelphia Court of Common Pleas issued a Judgment and Order requiring Dominion Management of Delaware, Inc and Dominion Management Services, Inc., which did business as CashPoint, and their owner and Vice President Kevin Williams, to pay more than $8.5 million for charging illegally high interest rates on car title loans.
“These defendants thought that because they were based in Delaware they could speed past Pennsylvania laws and exploit consumers by charging illegally high interest rates,” Attorney General Josh Shapiro said. “With today’s judgment, the Court held Kevin Williams accountable and sent a clear message that Pennsylvania’s usury laws apply to car title loans made to Pennsylvanians, regardless of where the lender is located.”
Of the $8.5 million, the Court designated $5.3 million as restitution for consumers, in addition to $3.2 million in penalties and $41,000 in costs. CashPoint and Williams were also ordered to cancel $3.2 million in outstanding loans and release all remaining liens on 800 vehicles. The Court also banned defendants from participating in any business that makes loans to residents of Pennsylvania, and it prohibited them from selling, assigning, collecting on, or disclosing any information regarding the remaining loans.
The Attorney General had sued CashPoint, Williams, and another now-deceased owner in October 2018. The Court found that CashPoint and Williams had made more than 3,200 car title loans to Pennsylvanians and placed liens on their Pennsylvania-titled vehicles between 2013 and 2018. These loans were all well above the 6% interest rate limit for unlicensed lenders: most had annual interest rates above 200%, and some were higher than 360%.
The Court found that the defendants had violated the Unfair Trade Practices and Consumer Protection Law, the Loan Interest and Protection Law, and two provisions of the Corrupt Organizations Act.
The Office of Attorney General has a related lawsuit against Kevin Williams’s brother and co-owner, Mark Williams, still pending before the Philadelphia Court of Common Pleas.
Federal Court Victory Against Auto Equity Loans of Delaware
Separately, the Attorney General won an important court ruling against a different car title lender, Auto Equity Loans of Delaware, LLC (AEL), which had sued the Attorney General in an attempt to block a consumer protection investigation.
Three years ago, the OAG initiated an investigation into AEL. As part of the investigation, investigators sent a request for documents and data to Auto Equity. In response, Auto Equity sued the OAG, asking a Federal Court to declare that since AEL asserts that it does not operate in Pennsylvania, the United States Constitution bars the OAG from investigating AEL.
After extensive litigation led by OAG’s Civil Litigation Section, the U.S. District Court for the Middle District of Pennsylvania granted the OAG’s Motion for Judgment on the Pleadings and dismissed AEL’s lawsuit, holding that, “the Attorney General is entitled to investigate and test Plaintiff’s claim that no part of the company’s loan transactions took place in Pennsylvania.”
The Court reasoned that Auto Equity “presents no persuasive authority that would bar the Attorney General from investigating the scope and extent of its conduct,” and that “It would be improper for the court to usurp the Attorney General’s investigatory authority with civil fact finding and injunctive relief at this stage.”
The Federal case was litigated by Deputy Attorney General Alexander Korn, and the OAG’s investigation into AEL and lawsuit against CashPoint and Williams are led by Assistant Director for Consumer Financial Protection Nicholas Smyth.
# # #