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In those state's I have listed under "the state does not license companies not located in that state, but requires a state issued license to lend" requires a physical location, not just to be associated with a physical location. They will not license companies not located in that state. KY is different.
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I am just trying to elaborate on Kentucky IPDL loans based on my understanding. Please don't be upset Goudah. Your work is great and I can see you spent a lot of time researching the different states. It is also possible that my information is not completely accurate since I only had a couple of phone coversations with one state employee of the Office of Finance. I actually made those phone calls around the time Cannr first joined the site to find out for myself and for her if IPDLs were legal here. Since then she has done her own research as you posted.
It is deffintely an issue of licensing like you stated in a previous post. Kentucky has set it up to where it is almost impossible for an IPDL to be licensed here and do business here properly. They require a physical store front and they require a physical check to be signed and held by the storefront. They don't make it simple and just state IPDLs are illegal in Kentucky but they make it very difficult for them to obtain said license and operate legally.
My understanding per the conversations I had with the Office of the Finance is exactly what you just stated above for Kentucky. Kentucky requires a physical location to get a license. They are required to have a storefront they do business out of. They are also required to obtain a physical check to make a loan. They will not license companies if the company is not physically located in the state. The loophole I mentioned was they could potentially set up a physical shop anywhere in Kentucky and then loan to the entire state via the net but they would still be required to get the physical check. I personally think it would be a pain to run the business that way but it is possible I suppose. Without the check or the license the loan was made illegally.
On a side not the partnership thing is just something I threw out there to skirt the law. I don't know if it has occured but what I was suggesting is a company could potentially buy an existing storefront or make it appear like they are doing business out of that storefront and maybe get a license. That is an assumption on my part. I would hope that the Office of Finance would not license more than one PDL per business location but I don't know. Again that internet company would still be required to obtain the physical check via snail mail prior to making a loan and that's assuming the person signing the check does not have to be present when presenting the check to the store front.
In reality it is very unlikely an IPDL would go through any of this hassle including the IPDLs that try to follow the laws so they choose to loan illegally in Kentucky. It is much simpler for them. They calculate the loss as part of their business. The people borrowing money over the net that don't know about the PDL laws far outweigh those that do. With almost zero penalty other than a few refusing to pay the fees based on those laws it only makes sense for them to operate this way. They just lump those guys in with all the others that refuse to pay for other reasons. Until the AG steps in with some criminal prosecutions for loan sharking or making illegal loans, I really don't see much changing here.
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