Reddam’s CashCall fighting states over loan business
J. Paul Reddam, owner of Triple Crown-hopeful I’ll Have Another, has come under fire for the business practices of CashCall, a company he owns, reports Bloomberg Businessweek. CashCall has faced or is currently facing legal trouble in multiple states, including California, West Virginia, and Maryland. It is also connected to a lender in South Dakota who is facing enforcement action from the Federal Trade Commission.
CashCall makes unsecured loans of up to $25,000 with high interest rates and, according to Bloomberg Businessweek, “abusive debt-collection practices.” The interest rates are high enough that they are considered illegal in states with usury laws, such as West Virginia. In response to the claim that such loans were illegal in West Virginia, CashCall said in court filings the loans were not illegal because they were made by a bank, not the company itself. CashCall, says Reddam simply buys the loans after they’ve been made.
Reddam says his business is filling an important gap that banks are missing.
“(Americans are) definitely not savers,” Reddam said. “So the market that CashCall has pitched to are people who are employed, making decent money, who spend it just as fast as they make it. It is what it is.”