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 Posted: Mon Jul 23, 2007 9:12 am Subject: internet payday loans in Philadelphia
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HI
New to this site. I have 7 internet payday loans. I see alot of people saying they should be paid off because in certain state's how would I know where to find that out and also what is a cease and asst letter?
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cynthiaw4
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Posted: Mon Jul 23, 2007 9:45 am Subject:
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In PA pdl's only have to be licensed in another state to lend legally. So you would have to find out if any of the companies you loaned from are licensed in another state to see if they are legal or not.
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goudah2424
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Posted: Mon Jul 23, 2007 10:13 am Subject: loan
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How would I find that information out?
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cynthiaw4
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Posted: Mon Jul 23, 2007 10:25 am Subject:
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If you want to post the names of the companies you are dealing with, we may be able to help you find them. Otherwise, I'd look in the state that they are located in first, or call them up and ask them where they are licensed. Sometimes they will tell you, other times they will lie, so it's hit or miss.
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goudah2424
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Posted: Mon Jul 23, 2007 10:28 am Subject:
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Oneclick cash
zip cash
united cash loans
discountadvances
cash2day4u
tendollerpaydayloan
paydayselcet
Thanks so much
Cindy
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cynthiaw4
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Posted: Mon Jul 23, 2007 11:31 am Subject: Payday Loans
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You can start weeding down by asking them
for their State ID # or EIN # to prove
that they are a legimate company and
contact the FDIC to validate them.
Especially if they won't let your Bank
do a wire transfer to their Bank.
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debprz0102
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Posted: Mon Jul 23, 2007 11:37 am Subject:
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Huh? The FDIC has nothing to do with state licensing of payday loan companies . . . . And you wouldn't want them to do a wire transfer. I don't know if the above response was to another post, but i'm confused . . . .
I know that cash2day4u is not licensed anywhere, and tendollar is MTE (right?) so they aren't going to be licensed anywhere either. I'm checking on the rest, but odds are pretty good most if not all aren't licensed anywhere, although i think payday select is licensed in DE.
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goudah2424
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Posted: Mon Jul 23, 2007 11:40 am Subject: Payday Loans
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Wow 7 of them?
Start weeding them down by asking them for their State ID or EI Number that proves they are registered
as a Payday Lender, your bank should be able
to wire transfer payments to their bank.
They will ask you why you need that information
but there are a lot of "payday" websites
that are not legit. GET EVERYTHING IN WRITING
including why they won't give their State ID
or EI #.
Check your state usury laws and pay day lending
laws. Review the Rico Act. For around 75.00
look in your local phone for a Consultation
with a Consumer Law Lawyer.
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debprz0102
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Posted: Mon Jul 23, 2007 11:45 am Subject:
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Um, DO NOT do a wire transfer from your bank to theirs! You should only pay them with money orders or some other way that will NOT give them any account information.
Also, their EIN number will only show you that they have a license to do business. That is different then a license to do payday lending. That is a completly different situation. The state ID number or EIN will not help you.
Also, again, in PA they have a "loophole" that allows companies not physically located in PA to lend to PA consumers over the internet without a PA license, as long as they are following the laws of the state in which they are licensed. This information can be found on the PA dept of banking website, under laws and regulations, interpretive letters, commerical code.
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goudah2424
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Posted: Mon Jul 23, 2007 11:50 am Subject:
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Ok I'm confused. It they are not licensed what can I do? Should I out a hold on my bank. My account is negative so I can not close it. Also what do I write in the letter. And is this Loophole bad for me?
Thanks
Cindy
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cynthiaw4
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Posted: Mon Jul 23, 2007 11:55 am Subject:
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If they are not licensed then you only would owe them the principle amount borrowed. So if you've paid them more then you borrowed in fees then you need to request a paid in full letter (more on that later).
Please read this thread about closing your account:
http://www.debtconsolidationcare.com/paydayloan/close-account.html
See what your bank can do to stop these debits.
You need to also write them letters revoking any authorization to debit your accounts and any wage assignments.
This loophole isn't the greatest thing, but it isn't really that bad because most of the companies you are dealing with aren't going to be licensed anywhere. The ones that are licensed you will need to make some sort of payment arrangements with.
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goudah2424
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Posted: Mon Jul 23, 2007 11:59 am Subject:
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In the letter you pretty much need to have the following points:
1. You revoke any and all authorization you gave to debit in any way any account you may have.
2. You revoke any and all wage assignments you may have signed.
3. Since this company isnt' licensed, and you have paid more then the principle, you request that your account be marked paid in full, that no further collection activities are initiated against you, and that your account status is updated as paid as agreed with any reporting agency.
4. If you haven't paid back the principle, or the company is operating legally, offer up payment arrangements you can afford. Send only money orders or other source of payment that doesn't have any account info on it.
5. Send this letter certified mail. Keep a copy.
This is just an outline of the things you need to include, and i'm typing fast so I may have left something out - If you browse the forum here you will read other's experiences and such and will be able to glean from the posts what sort of information you need to include.
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goudah2424
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Posted: Mon Jul 23, 2007 12:05 pm Subject:
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goudah,
You are correct, there is no way that a PDL company should ever get bank information once the initial account is closed / frozen / blocked et al. However, with respect, I don't know if you are entirely correct regarding the "loophole" in PA law if the letter I am reading is the one you referenced. You responded to a thread that I had started a while ago with the same information, and while you may be correct on one level, I think it isn't set in stone. Is this the letter that you are referring to?
http://www.banking.state.pa.us/banking/lib/banking/laws_and_regulation s/062405.pdf
| Quote: | June 24, 2005
Re: Internet Consumer Lending Activity
Dear:
This is in response to your letter to the Department of Banking (the “Department”) in which you request
the Department’s confirmation that [redacted] (the “Company”), a Delaware limited liability company, is
not required to obtain a license under the Consumer Discount Company Act (“CDCA”), 7 P.S. § 6201 et
seq., in order to make consumer loans via the internet to residents of Pennsylvania.
You indicate in your letter that, within 12 months, the Company intends to make consumer loans via the
internet to Pennsylvania residents that will have a minimum amount of $10,000 at initial interest rates of 5
to 7%, based upon current interest rates. Interest rates on the loans will either be variable or fixed, as
selected by the borrower prior to the date the loan is made. The loans will be unsecured and have
repayment terms that range from a minimum term of one year to a maximum term of 30 years. The
Company does not and will not have any offices, equipment or personnel located within Pennsylvania.
Section 3 of the CDCA provides in pertinent part that:
[o]n and after the effective date of this act, no person shall engage or continue to engage in
this Commonwealth, either as principal, employe, agent or broker, in the business of
negotiating or making loans or advances of money on credit, in the amount or value of
twenty-five thousand dollars ($ 25,000) or less, and charge, collect, contract for or receive
interest, discount, bonus, fees, fines, commissions, charges, or other considerations which
aggregate in excess of the interest that the lender would otherwise be permitted by law to
charge if not licensed under this act on the amount actually loaned or advanced, or on the
unpaid principal balances when the contract is payable by stated installments except a
domestic business corporation organized under or existing by virtue of the Business
Corporation Law of this Commonwealth, after first obtaining a license from the Secretary of
Banking of the Commonwealth of Pennsylvania in accordance with the provisions of this act.
7 P.S. § 6203.A (emphasis added). Since the Company will not have any offices of any kind in
Pennsylvania or people physically present in Pennsylvania acting as principal, employee, agent or broker
as those terms are contemplated in Section 3 of the CDCA, the Company is not “in this Commonwealth”
as that term is used in Section 3 of the CDCA. Therefore, it is the position of the Department that the Company is not required to obtain a license under the CDCA in order to originate unsecured consumer
loans via the internet to Pennsylvania residents. This position is conditioned upon the Company being
licensed or otherwise authorized under the Company’s home state law to engage in this type of lending
activity.
It is recommended that you refer to the Department’s website at www.banking.state.pa.us under the tabs
“Interpretation of Laws- Interpretive Letters- Consumer Discount Company Act” for redacted copies of
prior consistent interpretive letters that may address aspects of the Company’s proposed internet lending
activities.
This letter states the Department’s position regarding the applicability of the CDCA to the activity you
propose in this letter, and does not opine on any other relevant state or federal laws, such as the applicable
laws of the Company’s home state.
The Department’s analysis is based upon the facts as stated in this letter. Any change in the facts could
result in an amendment or reversal of the Department’s position. This letter has been authorized by the
appropriate Department personnel and constitutes a duly authorized statement of the Department’s position
regarding the issues discussed herein. This letter may not be relied upon or construed as constituting legal
advice.
Please do not hesitate to contact me if you have any further questions regarding this matter.
Sincerely,
Carter D. Frantz
Deputy Chief Counsel
cc: Timothy J. Blase
Director, Bureau of Supervision and Enforcement
David H. Bleicken
Director, Bureau of Licensing, Investigations and Consumer Affairs
James R. Keiser
Administrator, Nondepository Financial Institutions
Gazala Merchant
Chief, Licensing Division |
If I am reading that correctly, in this letter it is explicitly stated that interest shall be no more than 7% apr and the minimum loan term shall be 1 year. If I am interpreting this letter in the correct way, that would immediately dispense of iPDL companies as far as being protected with this law.
Maybe I'm wrong, I'm just presenting what I have come up with.
Either way, to the original poster, goudah is right for sure about the bank account. NEVER, EVER, give any new account information to PDL companies. They will debit debit debit until the cows come home.
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tukkitrocks79
Joined: 03 Jul 2007
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Posted: Mon Jul 23, 2007 12:13 pm Subject:
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That is what the company that the letter was addressed to was planning on doing - Lend for a term of 12 months at 5 - 7% interest. That isn't the law, just what this companies "plan" was.
| Quote: | | You indicate in your letter that, within 12 months, the Company intends to make consumer loans via the internet to Pennsylvania residents that will have a minimum amount of $10,000 at initial interest rates of 5 to 7%, based upon current interest rates. |
I emailed back and forth with James Keizer, the guy in charge of regulating pdl's in PA. This was the emails:
| Quote: | Emails to and from PA Banking Dept
Hello,
I have a question about payday loans in Pennsylvania. Does the small loan rate cap of $9.50 per $100 per year discount or 24% per year apply to these loans? I took out a few on the internet and am trying to figure out how much I legally need to pay. For instance on a $200 loan would I be legally responsible for paying back only $248?
Thanks!
Reply
Dear Ms.:
The 9.5 discount and the 24 % simple interest refer to calculations that can be used by companies that are operating in Pennsylvania and are licensed under Pennsylvania’s Consumer Discount Company Act. With a number of exceptions, a lender that is located inside of Pennsylvania and who does not have any special lending authority (i.e., a special license or charter) who is making smaller loans not secured by real estate can only charge interest at a rate of 6% simple.
A lender that does not have a physical presence in Pennsylvania but who has lending authority from some other state can generally charge the interest rate and finance charges allowed by that other state.
The Department may or may not be reviewing this policy and I would not count on this e-mail as an interpretive opinion before starting any lending or business operations.
James Keiser | Administrator Non-Depository Institutions
17 North Second Street, 13th Floor | Hbg PA 17101
Phone: 717.783.8242 | Fax: 717.787.8773
jkeiser(at)state.pa.us | www.banking.state.pa.us |
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goudah2424
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Posted: Mon Jul 23, 2007 12:16 pm Subject:
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I do agree that it isn't "set in stone" though. It is just the PA Banking Depts interpretation of the law. But it is what they tell any company lending over the internet. So I would think that if something ever went to court the ipdl would have a good defense, seeing how the state itself told them it was okay. Most payday loan laws are very gray . . . . That's why I always prefer to speak with the people that regulate and interprete the laws. That way I can back up what I'm saying. 
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goudah2424
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Posted: Mon Jul 23, 2007 12:17 pm Subject:
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I didn't realize you had a direct response from the PA Dept of Banking.
Wow, that's a harsh reality for me right now...I was still thinking that I was protected since I live in Pennsylvania. Ouch.
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tukkitrocks79
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