Attorney General Phil Weiser’s office has entered into a settlement agreement following allegations that non-bank entities partnered with out-of-state banks to provide loans with interest rates in excess of what Colorado law permits.

“Many Coloradans are hurting financially due to the economic impact of the COVID-19 pandemic and they are susceptible to unscrupulous lenders who take advantage of them, lending at rates far above what Colorado law permits,” said Weiser. “This agreement protects Colorado consumers and creates a model for how other lenders can comply with Colorado law and treat consumers fairly.”

According to the settlement, which stemmed from two lawsuits,  Avant of Colorado and Marlette Funding, LLC violated the state’s charge limits in coordination with WebBank and Cross River Bank, chartered in Utah and New Jersey, respectively.

The defendants disputed the claim, arguing, among other reasons, that federal law preempts Colorado’s regulations. They denied liability or wrongdoing.

The terms of the agreement stipulate that the banks and their partners will commit to capping rates for loans to Coloradans at 36% and will pay in excess of $1 million to Colorado for consumer protection efforts. The companies will pay an additional $500,000 to MoneyWi$er, a program that supports personal financial literacy in Colorado’s school system by providing workshops for teachers.