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People ex rel. Madigan v. CMK Invs., Inc.

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

December 9, 2014

PEOPLE OF THE STATE OF ILLINOIS, by LISA MADIGAN, ILLINOIS ATTORNEY GENERAL, Plaintiff,
v.
CMK INVESTMENTS, INC. d/b/a ALL CREDIT LENDERS, an Illinois Corporation, [1] Defendant

For People Of The State Of Illinois, by Lisa Madigan, Illinois Attorney General, Plaintiff: Vaishali Rao, LEAD ATTORNEY, Office Of The Illinois Attorney General, Chicago, IL; Lisa Madigan, Attorney General of Illinois, Chicago, IL; Sarah Alipourian Poulimas, Illinois Attorney General's Office, Chicago, IL; Susan N Ellis, Office of Illinois Attorney General, Springfield, IL; Thomas Patrick James, Illinois Attorney General's Office (100 West Randolph), Chicago, IL.

For CMK Investments, Inc., doing business as All Credit Lenders, Defendant: Jonathan N. Ledsky, LEAD ATTORNEY, Craig Allen Varga, Scott J Helfand, Varga Berger Ledsky Hayes & Casey, Chicago, IL.

OPINION AND ORDER

Sara L. Ellis, United States District Judge.

This is a case brought for and on behalf of the People of the State of Illinois by Lisa Madigan, the Illinois Attorney General (" Plaintiff") to remedy alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (" ICFA"), 815 Ill. Comp. Stat. 505/1 et seq., and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the " Dodd-Frank Act"), 12 U.S.C. § 5301 et seq., by Defendant CMK Investments, Inc., d/b/a All Credit Lenders (" All Credit Lenders"). Plaintiff alleges that All Credit Lenders offers an unfair revolving line of credit product and engages in unfair, abusive, and deceptive practices in connection with that product. Before the Court is All Credit Lenders' motion to dismiss. Because the Court finds that the claims are not barred by res judicata or by the disclosures that accompanied the loan agreement, the motion to dismiss [13] is denied.

BACKGROUND[2]

I. Consumer Finance Regulations

Both federal and state law provide protections for consumers obtaining credit from an entity like All Credit Lenders. The Truth in Lending Act (" TILA") and its implementing regulation, Regulation Z, provide that certain disclosures must be made for all open-end credit products. Open-end credit is defined as

consumer credit extended by a creditor under a plan in which:
(i) The creditor reasonably contemplates repeated transactions;
(ii) The creditor may impose a finance charge from time to time on an outstanding unpaid balance; and
(iii) The amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid.

12 C.F.R. § 226.2(a)(20). Additionally, the Dodd-Frank Act makes it unlawful for a creditor to provide a consumer with a financial product that violates federal consumer financial law and to engage in any unfair, deceptive, or abusive act or practice. 12 U.S.C. § 5536(a). Abusive acts or practices are those that

(1) materially interfere[ ] with the ability of a consumer to understand a term or condition of a consumer financial product or service; or
(2) take[ ] unreasonable advantage of--
(A) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service;
(B) the inability of the consumer to protect the interests of the consumer in selecting or using a consumer ...

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