A federal judge has ruled that payday lenders should be held liable for their predatory practices.
The ruling was issued Wednesday in a case involving a group of borrowers who sued payday lenders, including Wells Fargo, Fargo Fargo Bank, Fidelity, Bank of America, and Bank of New York Mellon.
The borrowers had alleged that the lenders, among others, failed to provide adequate protections to their customers when they overdrew their bank accounts.
The plaintiffs argued that the payday lenders were not acting responsibly in providing credit to consumers when they failed to report overdrafts or allow borrowers to take out payday loans.
Wells Fargo and other lenders are not required to have payday loan accounts.
But in many cases, the federal government has set up programs for people to have them and to pay the fees that go along with them.
Wells, Bank and Fidelity have denied any wrongdoing.
According to the ruling, the payday loan programs are an example of the “unreasonable, unconscionable, and predatory practices” that payday loan lenders have been “using to obtain access to credit for millions of consumers.”
In the case at hand, the lawsuit claimed that Wells Fargo “created a payday lending industry” with a “system of predatory lending practices” by charging borrowers “in excess of the monthly minimum” to borrow money.
The lawsuit alleged that Wells, the largest payday lender in the United States, and other payday lenders like Wells Fargo have used deceptive and misleading marketing practices to attract and keep their customers.
The lawsuits said the payday lending programs, like those that Fidelity and Bank offer, are “not only deceptive and abusive, but are also designed to create a self-fulfilling prophecy.”
The ruling comes in a lawsuit that was filed in July 2016 by the National Consumer Law Center and National Consumers League.
The complaint alleged that payday lending has been a lucrative business for the payday lender industry.
Wells and other financial institutions are responsible for the loan origination process and for making sure that the consumer who is making the loan gets a good deal on the loan, according to the lawsuit.
The complaints said the loans can take up to 30 days to pay off and can cost borrowers up to $3,000 a month.
“The payday lending companies are not operating with a clear understanding of how to protect their customers, and are creating a business model that makes consumers feel like they are under the thumb of the payday servicing industry,” the complaint stated.
“They prey on vulnerable consumers by making their loans seem like a no-risk loan.”
The suit also alleged that lenders have used the legal process to collect hundreds of millions of dollars from borrowers, which could have been used to help those consumers pay their bills and other costs.
The suit said that the lawsuits alleged that Fannie Mae, the mortgage lender that Wells and others are now suing, and Freddie Mac, the Federal Housing Administration agency, “have created an unregulated market in payday loans that drives consumers to the payday services marketplace.”