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 Posted: Thu May 15, 2008 10:00 am Subject: CashNet USA..... legal???
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I am in Minnesota, and CashNet USA is not licensed in my state. I have actually lowered my fees through them by being a "preffered member." Ahhh, the perks!! 
Rather than rolling over an existing loan, they call each "rollover" a "new loan." I belive Minnesota states that you may not use a new loan to pay off an old one. I have paid off a few loans through them in the last year, and then obtained new ones, along with many "rollovers."
Does it sounds like I should shoot for a refund since they are unlicensed in MN, or am I screwed since each "rollover" is shown as a new loan?
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jrperry_msu
Joined: 07 May 2008
Posts: 42
Debtcc Points: 513
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Posted: Thu May 15, 2008 12:04 pm Subject:
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CashNet USA is licensed in the state they are in. Since they are an internet pdl they are legal. Somebody else will give you the to info on your state and the laws.
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myalias
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Debtcc Points: 100
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Posted: Thu May 15, 2008 1:04 pm Subject:
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With CashNet, they debit your account for the loan balance due, then its takes a day or so before you can apply and obtain a new one. In essence, you are paying off a loan then you are reloaning not rolling over.
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volleyballmom
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Joined: 27 Aug 2007
Posts: 4177
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Posted: Thu May 15, 2008 1:10 pm Subject:
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I have only had my account debited for the interest charges/fees only, but they say that I have taken approximately 25 loans. They are considering each rollover a separate loan
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jrperry_msu
Joined: 07 May 2008
Posts: 42
Debtcc Points: 513
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Posted: Thu May 15, 2008 1:13 pm Subject:
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Maybe that helps them justify their interest rates, in stating that you are not rolling over, but taking paying on a new loan each time?
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jrperry_msu
Joined: 07 May 2008
Posts: 42
Debtcc Points: 513
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Posted: Thu May 15, 2008 1:16 pm Subject:
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Really? Since CashnetUSA is legal, they typically follow the rules.
How much did you borrow and how much are they debiting for interest/fees only?
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volleyballmom
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Posted: Thu May 15, 2008 1:28 pm Subject:
Latest Blog Post : http://frogpatch.yesdebtfree.org |
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Cashnet very often is registered as a credit service organization. Sometime with a different DBA but they do loan only where they are legal
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frogpatch
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Posted: Thu May 15, 2008 2:32 pm Subject:
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Minnesota does not require out of state companies that lend over the internet to be licensed in their state to be legal.
| Quote: | Emails to and from the MN Banking Dept:
From:
Sent: Monday, March 26, 2007 3:44 PM
To: Financial.Commerce(at)state.mn.us
Subject: Payday loan questions
Hello,
I have a question about internet payday loans. Do these need to be licensed in MN to be legal? Also, how do I calculate the legal amount of interest they can charge me according to MN laws? I see the laws state:
Maximum Finance Rate and Fees: $5.50: $0-$50; 10%+$5: $51-$100; 7% (min. $10) + $5: $101-$250; 6% (min. $17.50) + $5: $251-$350 (After default: 2.75% per month)
Finance Charge for 14-day $100 loan: $15
apr for 14-day $100 loan: 390%
So for a $300 loan how would I calculate the interest? And since no rollovers are allowed and the companies I have loans with have rolled them over countless times, would I be correct in saying that they are breaking the law? I've been told by several of them that they don't have to follow MN laws, even though they solicited me, because they are licensed in the state that they are located in. Is that correct?
I really appreciate any help or direction you could give me!
Thanks!
Response:
From: Terry Meyer
Sent: Tuesday, March 27, 2007 6:40 AM
To:
Subject: FW: Payday loan questions
First we don’t license lenders that are domiciled in other states. Minnesota law does not have a long arm statute and allows residents to seek loans wherever they want. Solicitations via the internet or ads do not place the lender in Minnesota, only a physical location would [the exception being residential mortgage lenders].
The way to calculate the APR for a 14 day loan is either using a T-I calculator. A fast check using the example for a $100 14 day loan is;
$15 finance charge divided by the $100 loan [proceeds of the loan, or amount financed] = .15, or 15%
.15 divided by the number of days in the loan, or 14, gives you the daily rate of .0004109589
Multiply that number by 365 [days in the year] = 3.91071428415, or 391.07% APR
Does that help – and in Minnesota rollovers or refinancing is not permitted. Name the MN lender and file a complaint.
Reply:
From:
Sent: Tuesday, March 27, 2007 8:45 AM
To: Terry Meyer
Subject: FW: Payday loan questions
Terry,
So to make sure I understand this, a payday loan company located in another state doesn't have to be licensed to lend to MN consumers. But do they have to follow MN laws about rollovers and interest? Or can they follow the laws of the state in which they are located in?
Thanks for you help!
Response:
From: Terry Meyer
Sent: Tuesday, March 27, 2007 6:58 AM
To:
Subject: RE: FW: Payday loan questions
It is similar to credit cards – I would bet, assuming you are a MN resident, that none of your credit cards are from banks located in MN. The Supreme Court ruled in both 1978 that rates, and 1996 that fees could be imported for credit cards issued by out of state lenders to other states borrowers. Its agency law. The use of the laws of the state in which the lender is licensed is required.
Please explain your interest and the firm you represent.
Reply:
From:
Sent: Tuesday, March 27, 2007 9:04 AM
To: Terry Meyer
Subject: RE: FW: Payday loan questions
Terry,
I don't represent any firm. I was just trying to get some more information about the laws governing these kind of loans. The reason I was curious about the specific point of if state law governs out of state pdl's is because where I live, Oregon, they do have a law saying that out of state pdl's much be licensed in OR and follow the laws of OR. I was hoping the same thing applied to MN, because in that case all his pdl's were grossly overcharging him.
Thanks!
Response:
From: Terry Meyer [
Sent: Tuesday, March 27, 2007 7:30 AM
To:
Subject: RE: RE: FW: Payday loan questions
Good luck – we recently received a complaint on a Payday loan from Malta. Since MN doesn’t have a law like OR each state would have to be contacted for their payday loan law to determine if a violation occurred. |
You really have to be careful when searching for licenses, as the companies are often licensed under their corporate name, and not the name you know them by.
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goudah2424
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Posted: Thu May 15, 2008 4:52 pm Subject:
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I have had loans with them for about a year, so I have been paying fees for quite some time. The fees started out at $25 per 100 borrowed, every two weeks.
My current loan is 250. I have paid 121.35 so far on this loan (43.75 per two weeks), but paid much more on previous loans prior to my fee discount going into effect.
Do you recommend just paying that one? That may not be a problem with all the money I save after not paying the illegal ones! 
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jrperry_msu
Joined: 07 May 2008
Posts: 42
Debtcc Points: 513
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