Consumer complaint received 2016-02-07
Product: Consumer Loan — Installment loan
Issue: Taking out the loan or lease — 
Company: ONEMAIN FINANCIAL HOLDINGS, LLC. (CO)

I closed on a personal loan from Springleaf on XXXX in the amount of {$2500.00}. Interest rate in the LOAN AGREEMENT AND DISCLOSURE STATEMENT dated XXXX, page XXXX, indicated a : CONTRACT RATE of 26.26 % per year. On page XXXX of the above statement is the following : GOVERNING LAW. The laws of the State of Colorado shall govern this Agreement, except as preempted by federal law.I read in the XXXX XXXX that on XXXX, Governor XXXX vetoed House Bill XXXX, pertaining to subprime loan interest rates, partial quote from said article below : " Gov. XXXX XXXX vetoed a bill Thursday that would have caused people who borrow from subprime lenders to pay up to 36 percent interest on the first {$3000.00}. 
Lenders can continue to ask for 36 percent on the first {$1000.00}, but from {$1000.00} to {$3000.00} the interest rate remains at 21 percent and 15 percent for all amounts over {$3000.00} " Key in those excerpts is in the second paragraph, which states that : '' Lenders can continue to ask for 36 percent on the first {$1000.00} ... '' '' ask '' being the operative word.Further research indicates that the original Colorado statute that deals with subprime loan rates is in Colorado Revised Statutes, the applicable section as described below : Colorado Revised Statutes, XXXX speaks of limits on interest rates for various loan amounts, too verbose to include here. 
Key in the XXXX passage is the phrase " may contract for '' 36 % on balances less than or equal to $ XXXX.I contacted Springleaf Customer Service on XXXX by phone in an attempt to get an explanation of why my loan 's interest rate was higher than 21 %, since the amount financed was {$2500.00}. They were unable to answer my question and transferred me to Springleaf 's Executive Customer Service representative XXXX. After my explanation of why I was questioning the 26.26 % interest rate, XXXX indicated that she 'd have to consult with their legal department and that she 'd contact me upon receiving Legal ' s opinion.On XXXX I received a call from XXXX informing me that the legal department was still looking into the matter and that she 'd contact me when they reached a conclusion.On XXXX, I received a call from XXXX in which she stated that, according to Springleaf Legal, the first {$1000.00} of the loan had its interest rate set at 35.99 %, and the remainder of the loan balance was under a 21 % interest rate, hence the " blended '' rate of 26.26 %. She stated that Legal felt they were not violating Colorado law since in this case a split or blended interest rate was applied to the loan.NOWHERE IN ANY OF THE SPRINGLEAF LOAN DOCUMENTS I READ, SIGNED OR WAS GIVEN AT CLOSING WAS ANY MENTION MADE OF A 35.99 % INTEREST RATE, NOR WAS ANY MENTION MADE OF A SPLIT OR BLENDED INTEREST RATE.It is my contention that this loan was offered under fraudulent and deceptive pretenses, since absolutely no mention was made of the usurious rate on the first {$1000.00} or of the split/blended rate to be applied to this loan 's balance. This was not a {$1000.00} loan, it was a {$2500.00} loan.I was also told that since this was a short term ( 3 years ) loan, the 35.99 % rate was applicable. I was n't aware that a 3 year loan was considered a short term loan. 
Had I been aware of the splitting up of the loan balance into the 35.99 % and 21 % rates, I WOULD NOT HAVE ENTERED INTO THIS CONTRACT and would have sought the needed funds elsewhere. I was never informed of a split 35.99 % interest rate until I questioned Customer Service about it. 
It is my opinion that the split interest rates I 've described above were applied in a disingenuous and deceitful manner and that this was executed by Springleaf as perhaps an attempted work-around to the recently vetoed XXXX to defeat the intent of XXXX XXXX. No attempt whatsoever was made to inform me of a tiered interest rate structure for my loan. The loan amount was for $ XXXX, not XXXX