Texas-based lender Think Finance must face claims by the Pennsylvania attorney general that it used a “rent-a-tribe” scheme to avoid liability for predatory lending, a Philadelphia federal judge has ruled, as reported by Dena Aubin for Reuters.

In an order last week denying the lender’s motion to dismiss, U.S. District Judge J. Curtis Joyner said the lawsuit brought by Pennsylvania Attorney General Katherine Kane supports “a reasonable inference of defendants’ intent to commit illegal activity.”

Filed in 2014, the state’s lawsuit said Think Finance used partnerships with American Indian tribes to take advantage of the latter’s sovereign immunity and circumvent Pennsylvania law capping interest rates on small loans at 6 percent. Think Finance was charging interest rates topping 200 percent in some instances.

Joyner’s decision “shows that we have a very viable, strong case against Think Finance,” Basil Merenda, a chief deputy in the attorney general’s office, said in an interview on Tuesday.

“It’s a very significant case,” marking the first time Pennsylvania used a civil racketeering charge in a consumer protection case, he said.

The case is Commonwealth of Pennsylvania v. Think Finance, U.S. District Court, Eastern District of Pennsylvania, No. 14-7139.

For the plaintiff: Basil Merenda and Saverio Mirarchi at the Pennsylvania Attorney General’s Office, and Irv Ackelsberg at Langer Grogan & Diver.