STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND …

1 STATEOFMICHIGANDEPARTMENTOFINSURANCEANDF INANCIALSERVICESB eforetheDirectoroftheDepartmentofInsuran ceandFinancialServicesIntheMatterof:Depa rtmentofInsuranceandFinancialServices,Pe titioner,WesternSkyFinancial, ,Respondents,andCashCall,Inc.,WSFunding, LLC,DelbertServicesCorporation, , [Issuedandenteredthisfr^dayofNfi,bx^? \ ^&irectorBased on theattachedCONSENTAGREEMENTand the files andrecordsoftheDepaitnientofInsurance and financial services (UDIFS")relating to this matter, theDirectorofDIFS finds toExecutiveOrder2013-1,effectiveMarch 18,2013,allauthority,powers,duties, functions, andresponsibilitiesoftheCommissionerofth e OfficeofFinancial andConsent Order 2of19 InsuranceRegulation("Commissioner")have beentransferredto theDirectorofDIFS("Director").]

2 Director hasjurisdictionand authority to accept the attached Consent Agreement andissue thisConsentOrderpursuantto the Regulatory Loan Act("RLA"), ,asamended, MCL ,and the MICHIGAN Administrative Procedures Actof1969("APA"), , asamended,MCL required notices have been issued in this case, and the notices and servicethereofwereappropriateand lawful in in the public APA have been defined terms used in this Consent Order notexpresslydefinedherein shall have themeanings ascribed to them in (1);Sections2(1)and 13(1) and (4)ofthe RLA, MCL (1) and (1) and (4).

3 AndSections 4(1) and 6(1)ofthe Credit Reform Act, (1) (1),Respondents and Participating Parties, as the originators, assignees, and/or servicers ofWestern Sky Loans made to MICHIGAN Borrowers, contracted for, charged, or collected onthe Western Sky Loans without being properly licensed, and further charged, contracted for,orreceiveda rateofinterestand fees on theWesternSky Loans thatexceededthe maximumamounts permitted under the foregoing and Participating Partiesneitheradmitnor deny ,therefore,IT attached Consent Agreement is incorporated herein and made apailof this ConsentOrder by and Participating Parties shall comply with all terms agreed to , and without waiving full compliance with all other terms contained in theattached Consent Agreement, Respondents and Participating Parties shall CEASE ANDDESIST from engaging in any violationsofMichigan law identified in Paragraph the matterscontainedherein and has the authorityto issue such further order(s)

4 As she shall deem just,necessary, fail to comply with the termsofthe ConsentAgreement or this ConsentOrder,Section 9eofthe RLA, ,authorizes theDirector to apply to the Ingham County Circuit Court to enforce such terms, and the StateofMichigan may pursue this or any other availableadministrativeorjudicialremedie s deny anyissuesregardingjurisdiction,however,t heyexpresslyconsentandagreetojurisdictio nbefore theDIFSD irectorand MICHIGAN courts solely for purposesofexecuting theattached Consent Agreement,entryofthis Consent Order, and any Order and 4of19 CONSENTAGREEMENTTHIS CONSENTAGREEMENTis agreed and entered into by and between the StateofMichiganDepartmentofInsurance andFinancialServices("DIFS") andDepartmentofAttorneyGeneral (collectively, the"StateofMichigan"), and Respondent Western Sky financial , LLCand itssubsidiaries(collectively,"WesternSky "),RespondentMaitin ,individually(" "),andInterested/Participating Parties CashCall, Inc.

5 , WS Funding, LLC, DelbertServicesCorporationand theirsubsidiaries(collectively,"CashCall ") and CashCall'sprincipal,J. Paul Reddam, individually(" "),as assignees and/or servicers of loans to Sky and Mr. Webb are referred to collectively hereafter as "Respondents,"CashCall and Mr. Reddam are referred to collectively hereafter as the"ParticipatingParties,"and all of the above-named parties to this Consent Agreement are referred to collectivelyhereafterasthe"Parties." ,pursuantto theMichiganRegulatoryLoan Act("RLA"), , asamended, MCL ^the DirectorofDIFS ("Director") is responsible for licensing andregulating all persons that engage in the businessofmaking loansofmoney and charge, contractfor, or receive on those loans agreaterrateofinterest than the lender would be permitted by lawto charge if the lender were not a licensee under the RLA.

6 AndWHEREAS,WesternSkyFinancial,LLC is a limited liabilitycompanyorganized underthe lawsofSouth Dakota with its principal placeofbusiness located at 612 E Street, TimberLake, SouthDakota57656on theCheyenneRiver IndianReservation;andWHEREAS, Mr. Webb is themanagingand solemember/ownerofWestern SkyFinancial, LLC, is anenrolledmemberoftheCheyenneRiverSioux Tribe, and resides in SouthDakotaon theCheyenneRiverIndianReservation;andWHE REAS,CashCall,Inc. is acorporationincorporatedunderthe lawsofCaliforniawith its principal placeofbusinesslocated at One City Boulevard West, Suite1000,Orange,CA92868;andWHEREAS,WSFu nding,LLC ("WSFunding")is a limitedliabilitycompanyorganizedunderdie lawsofDelaware and a wholly-owned subsidiaryofCashCall, Inc.

7 ; andWHEREAS,DelbertServicesCorporation("D elbert")is acorporationincorporatedunder the lawsofNevada with its principal placeofbusiness located at 7125 Pollock Drive, LasVegas, NV89119,and iswholly-ownedby Mr. Reddam; andConsent Order thechiefexecutiveofficer,president,and soleownerofCashCall,Inc.; the president and sole member/owner of WS Funding; and the director and ownerofDelbert;andWHEREAS, pursuant to the RLA, a person engaged in the business of making loans toMichiganresidentsfor personal, family, or household use is limited to charging, contracting for,or receiving an interest rate that does not exceed the usury limitof7% per annum on a writtenagreement (or 5% on an unwritten agreement) provided in the MICHIGAN Interest Rates Act, , asamended,MCL ("InterestRates Act"), unless the person has firstobtaineda licensefromtheDirectorundertheRLA,theMic higanConsumerFinancialServicesAct("CFSA" )

8 , , ,or isexemptfromlicensurepursuanttoSection20 ofthe RLA, ;andWHEREAS,undertheauthoritygrantedbySe ction9bofthe RLA, ,DIFS staffconducted aninvestigationofRespondentsanddetermine dthatRespondents,via Internetand televisionadvertisementsreceived by or visible to residentsofthe StateofMichigan,solicited,advertised,and offeredloans, and via theInternetandtelephone,made loans toindividuals who, at the timeofmaking the loan, were residentsofthe StateofMichigan (a"MichiganBorrower,r);andWHEREAS, Western Sky assigned to WS Funding the loans that it made to MichiganBorrowers (the"WesternSkyLoans"),makingWSFundingth eownerofthe loans, andCashCall*Inc.

9 OrDelbertservicedthe loans onbehalfofWSFunding,makingCashCall,Inc. orDelbert responsible forservicing,charging, andcollectingallprincipal,interest, and feesprovided for in the loanagreements;andWHEREAS,at all pertinent times referred to herein, Respondents and ParticipatingParties did not possess a license under the RLA or CFSA, and the StateofMichiganalleges thatneitherRespondentsnorParticipatingPa rties wereexemptfromlicensureunder Section 20oftheRLA, ;andWHEREAS,theStateofMichiganallegestha t alloftheWesternSky Loans includedand chargedinterestratesexceedingthe 7% perannuminterestratepermittedforunlicens edlenders under theInterestRatesAct, as well as the 25%interestratepermittedforlicensedlende rs under the RLA andMichiganCreditReformAct("CRA")

10 , , as amended, \andWHEREAS, the StateofMichigan alleges that allofthe Western Sky Loans includedand charged late feesexceedingthemaximumlate feepermittedunderthe RLA and , the StateofMichigan alleges that manyofthe Western Sky Loans included andcharged loan processing fees exceeding the maximum loan processing fee permitted under theRLA;andConsent Order 6of19 WHEREAS, pursuant to Section 9aofthe RLA, MCL , on July 25,2013,DIFSS enior DeputyDirectorStephen R. Hilker issued aNoticeofIntentiontoIssuea Cease andDesistOrder and Order for Hearing (the"Noticeand Hearing Order") directed toR