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Posted: Tue Nov 13, 2007 2:07 pm Subject: FDCPA and the Payday lenders

Here is a little snippet I took from the FDIC. It agrees with what I heard from a NACA attorney but I could never find supporting documentation. A Pay Day lender is in most cases an independent contractor for a larger financial institution which makes them a third party lender. Not the original lender therefore subject possibly to the FDCPA. The key phrase in this paragraph is "may become subject to."

Fair Debt Collection Practices Act (FDCPA)

If a bank engages in payday lending through an arrangement with a third party, and the third party collects defaulted debts on behalf of the bank, the third party may become subject to the provisions of the FDCPA. Although the bank itself may not be subject to the FDCPA, it may face reputational risk if the third party violates the FDCPA in collecting the bank's loans. A compliance program should provide for monitoring of collection activities, including collection calls, of any third party on behalf of the bank.

Posted: Tue Nov 13, 2007 2:15 pm Subject:

Hey Frog! Hows it going in your neck of the woods? Im not real smart when it comes to the laws so what does your post mean???

Posted: Tue Nov 13, 2007 2:17 pm Subject:

It would mean that IF the payday lender was not actually funding the loan, but acting on behalf of a bank, then the payday lender would be subject to the FDCPA.

Posted: Tue Nov 13, 2007 2:21 pm Subject:

excuse me for sounding stupid, but what are the rules of that Act?

Posted: Tue Nov 13, 2007 2:22 pm Subject:

If we could find out who the lenders to the PDLs are we could use that to stop the harassment. These places like Westbury Ventures are at times worse than the collection agencies with there threats. Maybe if they risked losing there funding it would stop. I know that the Bank of Delaware cut off a couple of them because of their tactics.

Posted: Tue Nov 13, 2007 2:44 pm Subject:

So does this mean, most PDL's are funded by banks?

Posted: Tue Nov 13, 2007 2:59 pm Subject:

I am sure most are funded by banks. Some are Credit Service Organizations that broker loans from other companies that are funded by banks.

Posted: Tue Nov 13, 2007 3:02 pm Subject:

Sorry Aminah I missed you. That is the Fair Debt Collection Practices Act that applies to the collection practice of third party lenders such as collection agencies. If you put FDCPA into Google you will find many explanations of it.