Berman Tabacco is co-lead counsel in a class action brought on behalf of individuals who took out high interest rate loans from American Web Loan (“AWL”), an online lender that purports to be an arm of the Otoe-Missouria Tribe (the “Tribe”). Plaintiffs allege that certain individuals and entities unaffiliated with the Tribe created AWL in a scheme designed to circumvent state and federal law, including RICO, usury laws and other laws against high-interest “payday loans,” to make loans of between $300 and $2,500 that carry annual interest rates as high as 726%.
Plaintiffs allege, among other things, that prior to taking out their loans, they were not informed about key loan terms including the interest rate, repayment terms, and total amount of payments owed. The loan documents associated with plaintiffs’ loans—which were not provided to plaintiffs until after they took out their loans—purport to be governed by the law of the Tribe (not the law of the borrower’s home state or federal law), and seek to force all disputes into arbitration that would be governed by tribal law only. Plaintiffs allege that this purported arbitration language is unconscionable and unenforceable. The class period in the action is from February 10, 2010 through June 26, 2020.
On July 9, 2021, the Court granted final approval of the settlement reached in this action. A copy of the Revised Settlement Agreement is available here. The settlement provides for an $86 million cash recovery for the class, cancellation of $100.5 million worth of outstanding class period loans that were owned by AWL as of December 17, 2020 and the unsatisfied debt owned by a third party debt collector called Northwood Asset Management Group, LLC, and provide for other significant non-monetary and injunctive relief. A copy of the final approval order is available here.