Delaware-based CashPoint and Owner Sentenced to Pay $ 8.5 Million, Cancel $ 3.2 Million in Outstanding Loans
HARRISBURG – Attorney General Josh Shapiro today announced victories in two separate lawsuits involving Delaware-based auto title lenders making loans to residents of Pennsylvania. These victories will help provide financial relief to consumers and hold companies doing business in Pennsylvania accountable under state law.
Victory of the State Court against Dominion Management d / b / a CashPoint
The Philadelphia Court of Common Pleas issued a Judgement and Order requiring Dominion Management of Delaware, Inc. and Dominion Management Services, Inc., which carried on business as CashPoint, and their owner and vice-president Kevin Williams, to pay more than $ 8.5 million for charged illegally high interest rates on car title loans.
“These defendants believed that because they were based in Delaware, they could go beyond Pennsylvania laws and exploit consumers by charging illegally high interest rates,” said Attorney General Josh Shapiro. “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 who. or the location of the lender. “
Of the $ 8.5 million, the court designated $ 5.3 million in 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 prohibited the defendants from participating in any business making loans to residents of Pennsylvania, and prohibited them from selling, assigning, collecting, or disclosing information regarding the remaining loans.
The The attorney general had continued CashPoint, Williams and another owner now deceased in October 2018. The Court found that CashPoint and Williams had granted more than 3,200 car title loans to Pennsylvanians and placed liens on their Pennsylvania 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 above 360%.
The court found that the defendants had violated the Unfair Business Practices and Consumer Protection Act, the Interest and Loan Protection Act and two provisions of the Corrupt Organizations Act.
The attorney general’s office has a related lawsuit against Kevin Williams’ brother and co-owner, Mark Williams, still pending in the Philadelphia Court of Common Pleas.
Federal Court wins against Delaware auto equity loans
Separately, the attorney general won a major court decision against another auto securities lender, Auto Equity Loans of Delaware, LLC (AEL), which sued the attorney general in an attempt to block a consumer protection investigation.
Three years ago, the OAG opened 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 claims not to operate in Pennsylvania, the United States Constitution prohibits the OAG from investigating AEL.
After extensive litigation conducted by the Civil Litigation Section of the OAG, the United States District Court for the Central District of Pennsylvania granted the OAG’s motion for judgment on the pleadings and fired AEL’s lawsuit, holding that “the attorney general has the right to investigate and test the claimant’s claim that no part of the company’s loan transactions took place in Pennsylvania.”
The Court ruled that Auto Equity “does not have any persuasive power which would prevent the Attorney General from investigating the scope and extent of its conduct” and that “it would be inappropriate for the court to usurp the power of investigation of the Attorney General with the search for civil facts and injunction at this stage.
The federal case was argued by Deputy Attorney General Alexander Korn, and the OAG’s investigation into AEL and the lawsuit against CashPoint and Williams are being led by Deputy Director of Consumer Financial Protection Nicholas Smyth.
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