Maryland orders S.D. firm to stop making payday loans

Lender accused of charging rates as high as 1,825 percent

March 09, 2011|By Hanah Cho, The Baltimore Sun

Maryland financial regulators have ordered a South Dakota-based payday lender to stop making loans to Maryland consumers, alleging that the company charged excessive interest rates and conducted business without being licensed.

Martin A. Webb -- doing business as Western Sky Financial, Great Sky Finance, Payday Financial and licensed in South Dakota -- was suspended in February by the Maryland Department of Labor, Licensing and Regulation. Webb's firms were providing consumer loans on the Internet.

According to the cease and desist order, 10 customers complained to Maryland regulators that they were charged interest rates as high as 1,825 percent.

Under Maryland law, payday lenders are allowed to charge a maximum interest rate of 33 percent on balances up to $1,000 and 24 percent on balances over $1,000, according to the order.

Webb could not be reached for comment Wednesday.

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