Class Action Lawsuit Claims CreditNinja Charges Excessive Interest Rates on Loans in Indiana

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CreditNinja Lending faces a proposed class action lawsuit alleging the online lender has violated an Indiana law by issuing loans with excessive interest rates to residents.

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The 13-page lawsuit was filed by an Indianapolis resident who says she took out an $800 loan through CreditNinja.com in June 2024 with an interest rate of 224.99 percent. The case claims the loan’s annual percentage rate greatly exceeds the 36-percent interest rate limit set by Indiana’s Uniform Consumer Credit Code for consumer loans.

According to the class action suit, CreditNinja has attempted to evade Indiana’s interest rate caps by engaging in a so-called “rent-a-bank” scheme whereby it partners with state-chartered banks to arrange consumer loans. Per the complaint, the online lender “launder[s]” its loans under the guise that they are made by one of its bank partners, Capital Community Bank and First Electronic Bank. Importantly, these banks are based in Utah, a state that does not limit interest rates, the filing explains.

Although CreditNinja purports that its bank partners are the true lenders, the defendant is, in fact, responsible for the allegedly illegal lending operations, as it manages every material step of the transactions, including advertising, brokering and servicing the loans, the lawsuit claims.

Though the plaintiff’s loan was ostensibly made by Capital Community Bank, the bank had “virtually nothing to do” with the account, the suit contends.

“Such ‘rent-a-bank’ schemes simply allow predatory lenders like CreditNinja to make loans to consumers in states which prohibit usury, including Indiana, with a modicum of legal cover,” the case charges.

The CreditNinja lawsuit looks to represent any Indiana residents for whom the company arranged a loan at more than 36 percent interest at any time in the last two years.

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