FARMINGTON, N.M. (AP) – Two New Mexico lenders are the defendants in a $900,000 lawsuit that claims they tricked low-income individuals into taking out high-interest tax refund anticipation loans.
The Daily-Times reports interest rates were as high as 240 percent on loans offered by Jeffrey Scott Thomas of J. Thomas Development of NM Inc. and Dennis Gonzalez, owner of Southwest Tax Loans.
The Consumer Financial Protection Bureau and the Navajo Nation Department of Justice filed the lawsuit, saying tax filers who qualified for the Earned Income Tax Credit were being steered toward these high-interest loans.
Thomas ran four H&R Block franchises, but the company severed its ties with him and is not named in the civil suit. Thomas’s lawyer, Allen Denson, said the financial protection bureau has mischaracterized his client’s business.