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Indian online lender lays off employees and halts new loans

Western Sky Financial, a controversial online lender that's owned by a member of the Cheyenne River Sioux Tribe of South Dakota, is curtailing most of its operations.

The company laid off nearly all of its employees -- 120, according to KELO-TV -- and will stop making loans on September 3. The action comes amid heightened scrutiny from state and federal authorities.

Most of the employees live on the reservation. "Right now, I'm looking for a job and I know that it's going to be a challenge," Chayo Makes Room For Them told KELO.

Only 17 employees will stay on board. "This affects the families of all tribal members who are losing their jobs but, collectively, the loss of these jobs will affect the broader economic stability of this poverty-stricken area," Martin Webb, the owner of Western Sky, said in a statement, KELO reported.

The company has been hit by complaints from state regulators who say the loans exceed state limits. The Federal Trade Commission is also suing Western Sky.

Get the Story:
Payday lender Western Sky Financial to stop funding loans on Sept. 3. (The Washington Post 8/27)
Online Lender Says It Will Stop Funding Loans (The Wall Street Journal 8/27)
Online Lender Western Sky Shutters Payday Business (The American Banker 8/27)
Following NY lawsuit, online lender to cease funding loans (Reuters 8/26)
Western Sky Workers Looking For New Jobs (KELO-TV 8/26)
Western Sky Laying Off Nearly All Its Workers (KELO-TV 8/26)

Related Stories:
New York sues online lender operated by Cheyenne River man (08/13)
Center: Indian Country payday lenders face increased scrutiny (8/9)
New York tells Indian Country payday firms to stop business (8/6)

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