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 Posted: Tue Aug 07, 2007 12:31 pm Subject: Advance America Goes Down in PA!
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| Quote: | August 3, 2007
Advance America Suffers From PA Decision
The decision of a Pennsylvanian court to bar Advance America, Cash Advance, Inc.’s operations in the state is turning out to have further-reaching consequences than it initially would have seemed. Three days ago, a Commonwealth Court panel appointed by the state Legislature decided that the country’s largest cash advance loan provider was in violation of Pennsylvania’s Consumer Discount Company Act by extending personal loans of up to five hundred dollars in return for six percent interest plus a "monthly participation fee” of one hundred and fifty dollars. The credit products were too close to payday loans for many, and the state took Advance America to task for the parallel. Payday loans have been illegal in Pennsylvania for almost ten years.
The payday loan company is smarting from the decision, and not just because it looks like they will have to leave Pennsylvania entirely – Advance America stocks plummeted in the wake of Tuesday’s decision. The fast cash loan chain’s shares fell two dollars and eighty-one cents, or nineteen-point-two percent, to eleven dollars and eighty six cents in the course of afternoon trading. The cash advance lender’s stock, which reached a low of eleven dollars and forty-two cents earlier in the session, has traded between twelve dollars and ninety-two cents and nineteen dollars and five cents during the past year.
August is already shaping up to be a cruel month for Advance America, and it’s barely begun. Last week, the payday loan company reported sub-stellar results for its second quarter. Advance America, like many national fast cash loan chains, has been troubled by stricter cash advance personal loan laws being effected by U.S. states, and the subsequent loss of income. |
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goudah2424
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Posted: Tue Aug 07, 2007 12:33 pm Subject:
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| Quote: | August 2, 2007
Court Forces Advance America to Shut Down PA Operations
Advance America, Cash Advance Centers Inc. was ordered two days ago to cease operations in the state of Pennsylvania. The Commonwealth Court of Pennsylvania ruled against Advance America, the nation’s largest faxless payday loan provider, on the question of whether the business could continue providing its "Choice Line of Credit" in the state. The unfavorable ruling means that Advance America must immediately cease operations in the state, a move that has the company saying it will counter-sue for the right to keep doing business.
Pennsylvania is, of course, a state that statutorily prohibits payday loans. The Check Cashing Licensing Act of 1998 specifically disallows check cashing and other deferred deposit transactions, and killed off all fast cash loans almost a decade ago. It’s one of the oldest cash advance personal loan laws in the country, and one that has served the state’s goals of keeping payday loans out of its limits quite well. For fast cash loan companies like Advance America, however, these bans represent lost income.
Advance America maintains that it complied with all aspects of Pennsylvania law in offering the credit product, which many have called a payday loan alternative. Pennsylvania’s courts seem to disagree, however. The CEO of Advance America, Ken Compton, released an icy statement on the subject, decrying the state for limiting consumers’ choices. It is unlikely that Compton’s words will sway many, as payday loans are widely accused of preying upon consumers too financially vulnerable to take action on their own behalf. Compton stated that: "Our customers are the backbone of our society, and they deserve every opportunity to fully participate in the state's economy and realize their financial goals.” The question of whether fast cash personal loan customers are helped or hurt by these short-term lending products is an ongoing debate of the larger issue of payday loan legality. |
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goudah2424
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Posted: Tue Aug 07, 2007 12:39 pm Subject:
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And here's the press release!
| Quote: | FOR IMMEDIATE RELEASE COMMONWEALTH OF PENNSYLVANIA
July 31, 2007 Department of Banking
Commonwealth News Bureau
Room 308, Main Capitol Building
Harrisburg, PA 17120
CONTACT: Heather Tyler
(717) 783-4721
BANKING DEPARTMENT CALLS COMMONWEALTH COURT RULING A VICTORY FOR PENNSYLVANIA CONSUMERS
Ruling Says Advance America’s Line of Credit Violates State Law
HARRISBURG – Acting Banking Secretary Victoria A. Reider said she is gratified that Commonwealth Court ruled today that Advance America, the nation’s largest payday lender, can no longer offer its “Choice Line of Credit” to consumers in Pennsylvania.
The court said the product, which allows customers to borrow up to $500 if they pay a $149.95 monthly “participation fee” and 5.98 percent interest, violates Pennsylvania’s Consumer Discount Company Act. The court referenced Pennsylvania’s significant interest in protecting borrowers from exploitative lending practices in finding that the law applies to this product.
“The court has ordered this product taken off the market and, for that, I am thankful,” Reider said. “When the Governor announced this suit, he called the product ‘outrageous’ and ‘one that took advantage of hard-pressed families.’ Today is a victory for those families.”
Reider also said that she will seek restitution through the court requiring Advance America to repay consumers.
Advance America, which operates nearly 100 offices in Pennsylvania, began offering the “Choice Line of Credit” in June 2006 after the Federal Deposit Insurance Corporation issued stricter rules for banks involved in payday lending. The added pressure from federal regulators forced most banks out of the business, severing the partnerships with out of state banks that had
allowed payday lenders to charge fees and rates much higher than those permitted by Pennsylvania law.
The Banking Department filed suit in September, alleging that Advance America was providing lines of credit to borrowers without a license and with interest and fees in excess of state law.
“This suit was filed to protect Pennsylvania consumers from a harmful product that we believe is payday lending by another name,” Reider said. “Families who seek these types of loans are usually living paycheck to paycheck and need just a little bit more to make it to Friday. Preying on their need by charging exorbitant fees is simply unconscionable.”
A copy of the court’s ruling is available at banking.state.pa.us. |
Last edited by goudah2424 on Tue Aug 07, 2007 1:42 pm |
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goudah2424
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Posted: Tue Aug 07, 2007 12:47 pm Subject:
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Goudah - I have been so busy I haven't really been able to visit the forums in a week or so...but I was going to post this after I made my payment on Friday to Advance America. They had a printed note that advised consumers of the court's decision.
Isn't this great news?
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tukkitrocks79
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Posted: Tue Aug 07, 2007 12:50 pm Subject:
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It's awesome news! Especially the part about them going after refunds for PA customers!
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goudah2424
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Posted: Tue Aug 07, 2007 1:36 pm Subject:
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Thanks for posting the info.
Can you please post the link to the website? We can read a few more pages of that website.
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FlyingCats
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Posted: Tue Aug 07, 2007 1:41 pm Subject:
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The website is listed at the bottom of the Press Release. Since we can't post active links the www is taken out.
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goudah2424
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Posted: Tue Aug 07, 2007 2:22 pm Subject:
Latest Blog Post : http://Lukesykwalker.yesdebtfree.org |
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goudah2424,
Your article gives me power and makes me stronger. I feel we are all in a fight for our financial freedom and we will beat them. WOW!! Im so excited!!
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Lukeskywalker
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Posted: Tue Aug 07, 2007 2:25 pm Subject:
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Thank you, but I can't take credit for the article. I mearly posted it.
But it is great news, especially for PA residents who could potentially be getting some refunds!
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goudah2424
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Posted: Tue Aug 07, 2007 2:27 pm Subject:
Latest Blog Post : http://Lukesykwalker.yesdebtfree.org |
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Your welcome and very nice things happeing for that person, really is an inspiration for us all.
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Lukeskywalker
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Posted: Tue Aug 07, 2007 2:34 pm Subject:
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It was actually the state that sued them. What happened was this: PA made it illegal for any pdl located in PA to operate. So Advance America started giving out "lines of credit" instead of payday loans. They would only charge about 6% interest, but you would also have to pay a $150 "participation fee" each month. They thought that they could get around the laws prohibiting pdl's this way, but the state acted and the courts ruled in their favor.
This could mean that every PA consumer that took out a "line of credit" with Advance America in the last couple years could get a heafty refund . . . . .
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goudah2424
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Posted: Tue Aug 07, 2007 2:36 pm Subject:
Latest Blog Post : http://Lukesykwalker.yesdebtfree.org |
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I hope that happens in every state with every payday loan store front or internet for everyone everywhere. Im so happy I want to cry!!!
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Lukeskywalker
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Posted: Tue Aug 07, 2007 9:35 pm Subject:
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That is truely awesome news for Pennsylvania--but Advance America can't be the only outfit that's offering "lines of credit" in PA, right? Fedup, are there other places in your state that are doing this, and is the state going after them as agressively as Advance America?
Advance America is brutal in collections and has made many people's lives hell, so hopefully this will be the start of something big in the USA.
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kscornell
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Posted: Wed Aug 08, 2007 6:39 am Subject:
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That is great news! I will be so glad when all states make these these companies illegal in all states! Their practices are so shady. What started out as possibly a good idea ended up turning into a racket that has gotten out of control. Thanks for posting goudah!
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2nband
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Posted: Wed Aug 08, 2007 7:00 am Subject:
Latest Blog Post : Groceries....How to Save $$! |
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YES! yesyesyesyes!! 
Thanks for posting that article, Goudah! I hope the recent rush of legislation and articles we're seeing regarding payday lenders going down is the beginning of a trend!!
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A journey of a thousand miles begins with a single step...and becoming debt free is a journey!
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SUEBEEHONEY70
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Posted: Wed Aug 08, 2007 11:12 am Subject:
Latest Blog Post : about |
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Hooray!
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My *NEW* Blog
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polly
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