WASHINGTON, Dec 16 (Reuters) - The U.S. Consumer Financial Protection Bureau on Monday said it was suing a California-based loan servicer for collecting money consumers did not owe.
CashCall Inc, a subsidiary and an affiliate collected money from borrowers who were given high-cost loans that broke consumer protection laws in at least eight states, the bureau said.
Consumers should not have had to repay those loans since they broke either licensing requirements or interest-rate caps in Arizona, Arkansas, Colorado and other states, the bureau said.
"Today we are taking action against CashCall for collecting money it had no right to take from consumers," consumer bureau Director Richard Cordray said in a statement.
State attorneys general are filing their own lawsuits against CashCall and others are already in litigation, the bureau said.
The loans CashCall serviced were issued by a separate lender, Western Sky Financial.
New York's attorney general sued that company in August for "scamming" consumers with high interest rates. Western Sky has since stopped making loans, the consumer bureau said.
The bureau's complaint against CashCall was filed in the U.S. District Court for the District of Massachusetts.