Consumer Financial Protection Bureau v. Cashcall, Inc.; WS Funding, LLC; Delbert Services Corporation; J. Paul Reddam,___F4th___ (9th Circuit Court of appeals 2022)
CahCall, Inc. made high interest, predatory, loans to consumers. CashCall, Inc., tried to avoid state usury laws by making loans through an LLC created by an Indian tribe. The loans had a built-in choice of law provision favoring tribal law. CashCall immediately bought all such loans and provided the funding. In litigation initiated by the Consumer Financial Protection Bureau (CFPB), the Central District Court of California (the District Court) tossed out the choice of law provision and found CashCall liable for an “unfair, deceptive, or abusive act” based on the state law violations but restricted its award of damages. In a recently published opinion, Consumer Financial Protection Bureau v. CashCall, Inc., 2022 WL 1614930 (9th Cir. May 23, 2022), the Ninth Circuit (the Court) affirmed the rejection of the choice of law provision and the subsequent liability of CashCall for violation of consumer protection laws, then reversed the limitation on available damages, ruling that CashCall had acted recklessly, which allowed for tier-two damages, and also that both legal and equitable restitution were viable recovery avenues. It remanded for consideration of these additional damages.