Around the holidays it is easy for New Jersey residents to get bogged down in credit card debt. While some may have the resources to pay off their obligations quickly, others may need the help of others to secure enough cash to eliminate their debts.
One place that some people look for money is private credit organizations. While some groups offer fair terms for those struggling to make ends meet, others have been labeled as predatory for imposing astronomical fees on people desperately searching for extra cash.
A New Jersey woman who previously accepted the terms of a private loan eventually paid off the principle and interest on a high rate obligation. After doing so she initiated what may become a class action lawsuit against U.S. Bank. While U.S. Bank was not her lender or her personal bank, it did allegedly process transactions for the predatory lender and enable it to do business.
Her predicament imposes an interesting analysis on the field of white collar crime because while predatory lenders may not legally operate in New Jersey, U.S. Bank's national reach enabled the woman to access its unreasonable terms and accept a loan from the predatory lender. Her lawsuit has charged U.S. Bank with racketeering and consumer fraud.
For its part U.S. Bank has commented that it will vehemently defend itself from the charges. It has also terminated its connection with the predatory lender in question and has developed some internal protocols that allow U.S. Bank members to stop payments to certain lenders.
This multi-jurisdictional matter will play out in federal court based on the inclusion of federal crimes and diversity of citizenship among the parties. As more and more Americans accrue greater credit card debt now and throughout the new year, it will be interesting to see how this white collar crime resolves itself.
Source: TheLedger.com, "Fight Against Illegal Payday Loans Turns to Banks," Jennifer Bjorhus, Nov. 20, 2013