Internet payday lender agrees to W.Va. refunds

CHARLESTON, W.Va. -- An Internet payday lender has agreed to stop making such loans in West Virginia.

Attorney General Darrell McGraw's office says Payday Financial LLC and its owner, Martin A. Webb, also agreed prior to a contempt hearing this month in Kanawha County Circuit Court to refund $135,000 in fees to 120 West Virginia consumers and pay $5,000 to the state.

Webb had claimed the loans originated on South Dakota's Cheyenne River Indian Reservation where Payday Financial was based and were subject to tribal laws. But Kanawha Circuit Judge Duke Bloom ruled Payday Financial's loans in West Virginia were governed by state laws and not protected by tribal immunity.

After Bloom set a contempt hearing for Oct. 11, the agreement between Webb and the state was signed.