Is Lone Star Funds just a loan shark?
LoanSharkFunds.org details private equity firm’s predatory lending investments
UNITE HERE today announced the launch of LoanSharkFunds.org, a resource for private equity investors, consultants, regulators, and consumers that analyzes Lone Star Funds’ investments in predatory lending enterprises.
Lone Star Funds, a Dallas-based institutional investment manager, has pursued a strategy of buying distressed residential and commercial debt. In 2014, the firm topped the 2014 PDI 30 ranking of top debt investors.
But as traditional distressed assets become harder to find, will Lone Star Funds look for predatory enterprises outside of its investors’ comfort zones?
LoanSharkFunds.org focuses on several Lone Star investments:
- DFC Global is a major international payday lender with advertised APRs as high as 33,000%. The firm operates in the US under the Money Mart and Check Cashing Store brands. Payday lending is banned in several US states, and has been under heavy scrutiny by the US Consumer Financial Protection Bureau.
- US MILES provides auto loans to active-duty US soldiers. In 2013, the firm was hit by a consent order for making false statements to soldiers about its program, and was forced to repay $3.3 million to servicemember victims. In June 2015, a year after its acquisition by Lone Star, the company announced that it would wind down the program and cease taking on new customers.
- Caliber Home Loans is a residential mortgage originator. Since 2011, borrowers have filed over 900 complaints with the US Consumer Financial Protection Bureau, and the firm has a 1-star rating on Consumer Affairs’ five-star system.
LoanSharkFunds.org will be periodically updated with new information as the firm deploys capital from its recently closed Lone Star Fund IX and Lone Star Real Estate Fund IV.