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Achey v. BMO Harris Bank, N.A.

United States District Court, N.D. Illinois, Eastern Division

August 19, 2014

CHRISTINA ACHEY, on Behalf of Herself and All Others Similarly Situated, Plaintiff,
BMO HARRIS BANK, N.A., Defendant

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[Copyrighted Material Omitted]

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For Christina Achey, on behalf of herself and all others similarly situated, Plaintiff: Jeffrey M. Ostrow, LEAD ATTORNEY, Kopelowitz Ostrow PA, Fort Lauderdale, FL; Amy Elisabeth Keller, Edward Anthony Wallace, Mark Richard Miller, Wexler Wallace LLP, Chicago, IL; Darren T. Kaplan, PRO HAC VICE, Chitwood Harley Harnes LLP, New York, NY; Hassan A Zavareei, PRO HAC VICE, Tycko & Zavareei Llp, Washington, DC; Norman E. Siegel, PRO HAC VICE, Stueve Siegel Hanson LLP, Kansas City, MO; Jason Henry Alperstein, Kopelowitz Ostrow P.A., Fort Lauderdale, FL.

For BMO Harris Bank, N.A., Defendant: Lucia Nale, LEAD ATTORNEY, Debra L Bogo-Ernst, Matthew C Sostrin, Mayer Brown LLP, Chicago, IL; Kevin S. Ranlett, PRO HAC VICE, Mayer Brown LLP, Washington, DC.

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Hon. Harry D. Leinenweber, United States District Judge.

Plaintiff Christina Achey (" Achey" ) brings this putative class action on behalf of herself and other similarly situated individuals, alleging that Defendant BMO Harris Bank, N.A. (" BMO" ) assisted various online payday lenders in the collection of debts in states where payday loans are illegal. Achey asserts claims for violations of the Federal Racketeer Influenced and Corrupt Organizations Act (" RICO" ), 18 U.S.C. § § 1962(c) & (d), assumpsit, unjust enrichment, and aiding and abetting under Pennsylvania state lending and usury laws. BMO has moved to compel Achey to arbitrate her claims in accordance with the arbitration provision contained within the loan agreements she signed. For the reasons stated herein, the Court finds that Achey's claims against BMO fall within the scope of that arbitration provision.


A payday loan is a small, unsecured short-term loan that ordinarily becomes due on the borrower's next payday. Typically, these loans feature exceptionally steep interest rates that often translate to more than 400% annually. Many states have taken steps to eliminate payday lending, either by outlawing the practice entirely or by limiting the feasibility of such loans by imposing strict interest rate caps on lenders. In an effort to circumvent these bans, some payday lenders have moved their operations to offshore havens or Native-American reservations while continuing to offer payday loans via the internet to consumers in states where such loans are illegal.

To facilitate the transfer of loan proceeds to customers' bank accounts and the debiting of their accounts for amounts due at the conclusion of the loan term, online payday lenders rely on Originating Depository Financial Institutions (" ODFIs" ), which are banks that function as middlemen between the lender and the Automatic Clearing House network (" ACH" ), an electronic payment system that processes direct credit and debit transactions. Once the account holder authorizes a transaction with the lender, the ODFI bank transmits that authorization through the ACH system to the account holder's bank, which, in turn, posts the appropriate credit or debit to the customer's account.

Achey is a citizen of Pennsylvania, which is one of several states that have outlawed payday lending. On October 11, 2012, Achey applied for and received a $200 payday loan (the " 2012 Loan" ) from MNE Services, Inc. (" MNE" ), a lending entity owned by the Miami Tribe of Oklahoma that offers loans through a website called The following year, on July 10, 2013, Achey applied for and received an additional payday loan from MNE in the amount of $350 (the " 2013 Loan" ). The nominal annual interest rate for these loans was 730% and 476%, respectively.

BMO is one of several ODFI banks that originate ACH debits and credits on behalf of various lenders. According to Achey, BMO is the ODFI responsible for originating debit entries on her account in connection with her 2012 and 2013 Loans. Achey alleges that BMO was aware of the fact that it was assisting MNE in the collection

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of usurious or unlawful loans through its role as an ODFI on those transactions and that its conduct thus violated federal and state laws.

For both the 2012 and 2013 Loans, Achey completed an online application and signed an electronic loan agreement (collectively, the " Loan Documents" ). Although Achey did not attach the Loan Documents to her complaint, BMO provided the Court with copies that it obtained from AMG Services, Inc. (" AMG" ), a company that services MNE's accounts and maintains records of MNE customer loan agreements. ( See, Decl. of Natalie C. Dempsey, ...

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