HARTFORD – Two small loan companies that issued loans to those consumers who were due legal settlement funds have to pay back borrowers more than $1.3 million as part of their own settlement with the state that they engaged in unlicensed activity, Connecticut Banking Commissioner Jorge Perez announced Jan. 28.
Oasis Financial and US Claims Capital were cited for doing business without a state license since 2016. As a result of the settlement, more than 900 Connecticut residents will be paid back for interest payments exceeding 12% made on loans. Both companies were also fined $10,000 each by the state banking department.
“These enforcement actions underscore the need for proper oversight to protect Connecticut borrowers,” Perez said. “I am happy that we were able to obtain the paybacks these borrowers deserve. I would like to acknowledge the hard work and diligence of our Consumer Credit Division, which was responsible for these enforcement actions.”
In September 2023, Oasis Financial applied for a small loan license through the banking department’s Consumer Credit Division. Upon receipt of the application the division requested information concerning Oasis Financial’ s prior Connecticut activity, specifically its practice of advancing funds to Connecticut borrowers with repayment due upon the settlement of legal proceedings.
The department found that Oasis Financial made at least 2,613 small loans, offered or solicited small loans and advertised small loans, all without a license. These loans were made or offered as advancements on legal settlements, which constitute “future income” and therefore were subject to licensure.
As a result of the settlement, Oasis Financial will pay back to Connecticut borrowers over $1 million, in addition to the $10,000 fine, and $1,200 in back licensing fees. The full terms of the consent order and the details of the restitution can be found here.
On its website, Oasis mentioned that it no longer offers its services to Connecticut borrowers.
“If you live in Arkansas, Connecticut, Kansas, Kentucky, Maryland, North Carolina, North Dakota, or West Virginia, we’re not able to provide pre-settlement funding at this time.
Arkansas, Connecticut, Kansas, Kentucky, Maryland, North Carolina, North Dakota, or West Virginia.”
This wasn’t the first time Oasis was cited for illegally providing pre-settlement loans.
In 2022, the Mississippi Attorney General Lynn Fitch announced that that state entered into a $1 million settlement with Oasis Financial regarding loans made benefits under the Mississippi Workers’Compensation Act. As part of the settlement, $1 million was put into a settlement fund out of which approximately 2,225 of Oasis’ Mississippi worker’s compensation clients can receive payments, according to a statement from the attorney general in 2022.
As for US Claims, the banking department found that the firm engaged in small loan lending and servicing of loans involving litigation settlements of Connecticut borrowers from July 1, 2016 to Sept.10, 2023, without the required small loan license,. Once US Claims became aware of the issue, they ceased small lending activity in the state and sought proper licensure from the department.
Under the settlement, US Claims will pay back more than $219,000 to more than 160 borrowers. They will also pay a $10,000 fine and $2,400 in back licensing fees. You can find the full consent order here.
