Nine payday lenders filed suit Thursday against new rules implemented by the state requiring them to refund some fees to consumers who prepay their loans.
The lawsuit, filed in Denver District Court, seeks judicial review of rules crafted by the administrator of the Colorado Uniform Consumer Credit Code and put into place in August.
The suit alleges that administrator Laura Udis, who is also a deputy attorney general, misinterpreted the intent of legislators who crafted the law, HB 1351, and said certain interest fees were to be returned on prepaid loans, prorated to the amount of time left on the note.
In three different interpretations, Udis bounced from saying the refund was to apply to interest fees and origination fees, to saying only interest fees, and then back again.
Attorney General John Suthers’ office, also named as a defendant in the suit, said it interpreted the rules properly.
The suit was spurred by a state examination in November of Stonepride Financial Corp., one of the plaintiffs, in which it was determined it had not properly refunded portions of a consumer’s origination fee.
The company was ordered to refund the money or face discipline, including loss of its license to work as a payday lender.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
