New York regulators have reached a settlement with Western Sky Financial LLC, CashCall Inc., WS Funding LLC and their owners, Martin Webb and J. Paul Reddam, for violating the state's usury and licensed lender laws in connection with personal loans they made over the Internet.

In the settlement, announced by New York Attorney General Eric Schneiderman's office, the companies and their owners will stop collecting interest on outstanding loans made by Western Sky to New York consumers, provide refunds to borrowers who paid back more than the principal of their loan plus the legal interest rate of 16 percent, and pay $1.5 million in penalties.

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