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 Posted: Thu Aug 23, 2007 4:26 pm Subject: Mn payday loan law
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i live in Minnesota where one of those states like pa and Louisiana that has a loop hole in the payday loan laws..which sucks big time.. can a ipdl sue you even though there license in another state?
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perry968
Joined: 18 Jun 2006
Posts: 238
Debtcc Points: 5243
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Posted: Thu Aug 23, 2007 5:03 pm Subject:
Latest Blog Post : Decision |
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Your best bet would be to call your AG's office or your Department of Financial Institutions in MN. and ask them if they are considered legal if they are licensed in another state. Some states allow this, some don't. However they would have to take you to court in your state ...I would think it depends on how much money is at hand whether they would bother to do that or not. Internet loans usually do not...store fronts will...Hopefully someone with more experience with your atate will post soon...
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Morningstarr430
Debt Samaritan
Joined: 13 Jun 2007
Posts: 2337
Debtcc Points: 39294
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Posted: Thu Aug 23, 2007 5:45 pm Subject: reply
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perry, which one of your pdl's is it?
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cannr
Moderator
Joined: 07 Jun 2007
Posts: 9374
Debtcc Points: 124815
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Posted: Fri Aug 24, 2007 7:06 am Subject:
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Technically they could sue you as long as they are licensed in another state, but odds of them doing so is very low. They would have to sue you in your state, so they would have to travel there, hire a local attorney, etc.
Can you elaborate more about your situation?
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goudah2424
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Joined: 31 Oct 2006
Posts: 8007
Debtcc Points: 111639
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Posted: Fri Aug 24, 2007 7:09 am Subject:
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Here are the emails I have from MN confirming what Perry was saying about MN allowing companies licensed in another state to lend to MN residents.
| Quote: | 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!
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From: Terry Meyer [mailto:Terry.Meyer@state.mn.us]
Sent: Tuesday, March 27, 2007 6:40 AM
To:
Subject: [SPAM] 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.
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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!
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From: Terry Meyer [mailto:Terry.Meyer@state.mn.us]
Sent: Tuesday, March 27, 2007 6:58 AM
To:
Subject: [SPAM] 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.
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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!
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From: Terry Meyer [mailto:Terry.Meyer@state.mn.us]
Sent: Tuesday, March 27, 2007 7:30 AM
To:
Subject: [SPAM] 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. |
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goudah2424
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Posts: 8007
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