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kklblue · #1 09-22-2008, 06:53 AM

I contacte the MN AG and found out the following:

For Immediate Release: September 5, 2008
Contact: Bill Walsh (651) 296-7531

Out of state Payday Lenders now subject to Department of Commerce licensing and regulation

(St. Paul, MN) The Minnesota Department of Commerce announced today it is now requiring all payday lenders making small denomination, short-term loans to Minnesota residents via the internet be licensed pursuant to Minnesota law. Licensing is required regardless of whether the lender has a physical presence in Minnesota. Payday lenders will also be required to comply with the limits on loan amounts, fees and charges, and other requirements of state law.

After further review of Minnesota law and statute the Department is now of the opinion that a payday loan made via the internet is made in the state where the borrower resides and the payday lender making such a loan is subject to Minnesota laws and licensure. As a result, all payday lenders making loans to Minnesota residents via the internet must meet the new licensing requirements effective December 1, 2008.

Financial institutions, including state or federally chartered banks or savings associations, industrial loan and thrift companies licensed under Chapter 53, regulated lenders licensed under Chapter 56, or any operating subsidiary of a financial institution, are not subject to the licensing requirements of Section 47.60, the Consumer Small Loan statute.

As an alternative, a payday lender may apply for an industrial loan and thrift company license under Chapter 53 of the Minnesota Statutes; however, the Chapter 53 license requires a physical presence in Minnesota.

Additional information concerning Section 47.60 licensing requirements and applications is available on the Department's web page at www.commerce.state.mn.us under "consumer small loans." Additional information concerning various Minnesota statutes is available at www.leg.state.mn.us/leg/statutes.htm.

The Division of Financial Examination of the Minnesota Department of Commerce is responsible for the regulation of state chartered banks and credit unions, mortgage companies, premium finance companies, accelerated mortgage payment companies, motor vehicle finance companies, consumer small loan companies and regulated loan companies, currency exchanges, money transmitters, automatic teller machines, and electronic funds transfer. The Division is also responsible for the licensing and financial regulation of insurance companies operating in Minnesota.

Thank god Minnesota wised up.

kklblue · #2 09-22-2008, 07:15 AM

I also found this:

56.19 VIOLATION.
Subdivision 1. Criminal penalty. Any person or the several members, officers, directors,
agents, and employees thereof, who violates or participates in the violation of any of the
provisions of sections 56.01 and 56.18 is guilty of a gross misdemeanor.
Subd. 2.[Repealed, 1983 c 252 s 16]
Subd. 2a. Penalty for intentional violations. Any lender intentionally violating this chapter,
when the violation does not also constitute a violation of any other provision of state or federal
law for which there is a remedy, shall be liable to the consumer in an amount not to exceed
$100 for each violation.
Subd. 3. Unlicensed lenders. If a person has violated this chapter by not obtaining a
license when required to make loans subject to this chapter, the loan is void and the debtor is not
obligated to pay any amounts owing. The debtor may recover from such persons all amounts
paid. No action may be brought under this subdivision more than one year after the date of the
last scheduled payment on the loan.
Subd. 4. Remedies exclusive. The remedies set forth in this section and section 48.196 are
exclusive. A violation of this chapter does not impair rights on a debt.
History: (7774-59) 1939 c 12 s 19; 1981 c 258 s 18; 1Sp1981 c 4 art 4 s 13; 1983 c 252
s 13; 1Sp1985 c 1 s 22,

Payday lenders have until 12/1/08 to get licensed.

dental0828 · #3 04-09-2009, 06:07 AM

This is all confusing language. So is there a place where we can find out which ones are licensed/legal and the ones that are not? Thank you

nohiogal · #4 04-09-2009, 06:10 AM

MN Link

#5 04-13-2009, 11:35 AM

"Subd. 3. Unlicensed lenders. If a person has violated this chapter by not obtaining a license when required to make loans subject to this chapter, the loan is void and the debtor is not obligated to pay any amounts owing. The debtor may recover from such persons all amounts paid. No action may be brought under this subdivision more than one year after the date of the last scheduled payment on the loan."

does this mean that if i have a PDL with a company that is not licesensd, I dont have to pay anymore than I already have?

#6 04-13-2009, 11:48 AM

I am in MN, and I understood that "Subd 3." as the lender is not licensed, therefore, the contract is void. Honestly, I didn't pay any of my illegal lenders back what I borrowed due to the fact that I had reloaned on all of my loans and made 0 payments before my bank account was closed. I pulled all bank statements and showed them all the money they got from me on illegal loans and that I wasn't paying them any more. I just kept sending the same email whenever they contacted me and actually 3 of them gave me PIF's. 2 haven't said anything to me in 4 months, and the other 2 I just paid off (they were legal).

Morally, you should pay back what you borrowed, and I morally did on previous loans, but that is my opinion. I paid 1 illegal lender $2,000 on a $500 loan. I didn't feel guilty about not paying them another $500. They still made a $1,000 profit off me. And they sent me a PIF.