First Premier Bank’s Class Waiver Tactic Sunk by 1000% Loan Rate

First Premier Bank can’t invoke a class action waiver against allegations that it facilitated unlawful predatory loans from online payday lender SFS, Inc. because the entire loan agreement is void, a New York federal court held.

Deborah Moss’s $350 payday loan agreement provided for a $105 finance charge and an annual interest rate of 995.45%.

But under New York’s usury law, contracts with interest rates exceeding 16% are unenforceable, so the entire agreement was void, Judge Edward R. Korman of the U.S. District Court for the Eastern District of New York concluded in an unpublished ruling Wednesday.

The loan agreement’s ...