Western Sky Financial has not issued loans since September of 2013 and was regarded as a questionable business by government officials who questioned the lender's practices. By associating with a Native American reservation and offering loans online, the company was able to charge over 300 percent interest on loans.
As of 2013, laws prohibiting predatory lending were in place in 25 states. Often, these laws establish maximum interest rates below 21 percent. New York's attorney general filed a lawsuit alleging Western Sky was attempting to circumvent the state's tough financial laws by offering loans to New York residents at excessively high interest rates. The State of Maryland also asked Western Sky to discontinue offering loans to Maryland residents after consumers complained about the lender's business practices.