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 Posted: Tue Aug 28, 2007 10:02 am |
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Hi all!
I wanted to share a letter I received from Pennsylvania Department of Banking ("Department"), regarding payday loans.
| Quote: | Thank you for contacting the Pennsylvania Department of Banking ("Department"), regarding payday loans you received on the Internet.
For the most part payday loans are not legal in Pennsylvania; however, entities that offer payday loans in Pennsylvania entered into partnership agreements to make and service loans on behalf of out-of-state banks/lenders and, thus, circumvent Pennsylvania’s lending laws. Over the past several years, some federal regulators had largely informally banned payday lending by their banks and last year the Federal Deposit Insurance Corporation (“FDIC”) made it clear that it believes that “providing high-cost, short-term credit on a recurring basis to customers with long-term credit needs is not responsible lending and increases banks’ credit, legal, reputational and compliance risks.”
So most of the out-of-state banks/lenders who had agreements to make loans in Pennsylvania withdrew from the marketplace. Also, please note that the Pennsylvania legislature has been actively considering two proposals related to payday lending. One proposal would allow the practice, but place tight restrictions on the industry to protect consumers. The other proposal would ban payday lending entirely.
Cheryl O’Hara Consumer Representative |
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PghChick
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Debtcc Points: 100
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| Posted: Tue Aug 28, 2007 12:27 pm |
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Does it resolve the problems that you are having with your present pdl companies? It seems to be a generic letter. There are still so many companies doing illegal business in PA and no actions seem to have taken till now.
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fatb88
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| Posted: Tue Aug 28, 2007 12:34 pm |
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It doesn't say anything about internet lenders not backed by banks. It really doesn't seem to answer anything . . . . On the PA dept of Banking website it states that internet based lenders that have no physical presence in PA can lend to PA consumers as long as they are licensed in another state and following the laws of the state that they are licensed in.
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goudah2424
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AnthonyLemons
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| Posted: Tue Aug 28, 2007 12:46 pm |
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I know! I've been trying to get concrete answers for months. The Banking Dept says one thing, and the AG's office says a totally different thing. What the banking dept says is posted on their website, and I would think that would make any attempts at lawsuits by the AG's office impossible.
If the AG's office were to sue a company for not being licensed by PA and not following PA's laws, all the company has to do is say the banking dept said I didn't need to be licensed, and to follow the lending laws of my state. It says it right here on the state's website.
Plus, if you contact the banking dept pretending to be a payday lender, they will flat out tell you that they don't license pdl's, that you only need to be licensed by another state, and that you need to follow the laws of the state under which you are licensed.
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goudah2424
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| Posted: Tue Aug 28, 2007 12:47 pm |
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I have to agree. Nice letter; however, it didn't answer a thing. Unfortunately.
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cannr
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| Posted: Tue Aug 28, 2007 1:11 pm |
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whole lotta nuttin' in that letter, if you ask me.
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SUEBEEHONEY70
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