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Author |
 Posted: Tue Jul 10, 2007 11:05 am Subject: new law |
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This is in response to your email corrrespondence addressed to the
Commissioner concerning Payday Loans. Payday lending is deemed to be a
prohibited activity in the State of New Jersey based on the criminal usury
limitations (N.J.S.A. 2C:21-19), however, there is no actual law that
specifically addresses Payday lending. Thanks for the opportunity to be of
assistance.
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smithmapleshade
Joined: 07 Jun 2007
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| Posted: Wed Jul 11, 2007 6:48 am Subject: |
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Right, most states that have ursury caps don't specifically prohibit payday loans, but most payday loan companies won't bother lending at that rate, so an ursury cap effectivly shuts down payday loans. So payday loans in itself isn't banned, but charging an interest rate higher then the cap is, and no payday loan company is going to lend for such a low rate.
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goudah2424
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| Posted: Wed Jul 11, 2007 6:57 am Subject: |
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goudah...that's an interesting thing you just said...it made a light bulb go off here. I have been having trouble interprting the Indiana law and my DFI guy wasn't much help explaining it..it says legal..but then lists the %'s etc. And I thought it meant legal if licensed but of course they are not. If I look up under just usury laws...could I get them on that??
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Morningstarr430
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| Posted: Wed Jul 11, 2007 7:19 am Subject: |
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Possibly, but if you state does have specific laws regarding pdl's then those would probably be a better bet.
Sometimes it's difficult to get info from the DFI - I'm gonna call them right now with some specific questions and see if I can get anything else for you.
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goudah2424
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| Posted: Wed Jul 11, 2007 7:21 am Subject: |
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oh thank you goudah!!!
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Morningstarr430
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| Posted: Wed Jul 11, 2007 7:33 am Subject: |
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Okay, i have to find another number to call. The 800 number only works if you are "in the calling area". Ughh . . .
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goudah2424
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| Posted: Wed Jul 11, 2007 8:00 am Subject: |
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I'm sorry....
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Morningstarr430
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| Posted: Wed Jul 11, 2007 9:09 am Subject: |
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Okay, I found the other number . . . . But have only managed to get people's voicemails . . . . I will keep trying . . . .
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goudah2424
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| Posted: Thu Jul 12, 2007 5:58 am Subject: |
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Just in case anyone was interested in what 2C:21-19 states.
| Quote: | 2C:21-19. Wrongful credit practices and related offenses
a. Criminal usury. A person is guilty of criminal usury when not being authorized or permitted by law to do so, he:
(1) Loans or agrees to loan, directly or indirectly, any money or other property at a rate exceeding the maximum rate permitted by law; or
(2) Takes, agrees to take, or receives any money or other property as interest on the loan or on the forbearance of any money or other interest in excess of the maximum rate permitted by law.
For the purposes of this section and notwithstanding any law of this State which permits as a maximum interest rate a rate or rates agreed to by the parties of the transaction, any loan or forbearance with an interest rate which exceeds 30% per annum shall not be a rate authorized or permitted by law, except if the loan or forbearance is made to a corporation, limited liability company or limited liability partnership any rate not in excess of 50% per annum shall be a rate authorized or permitted by law.
Criminal usury is a crime of the second degree if the rate of interest on any loan made to any person exceeds 50% per annum or the equivalent rate for a longer or shorter period. It is a crime of the third degree if the interest rate on any loan made to any person except a corporation, limited liability company or limited liability partnership does not exceed 50% per annum but the amount of the loan or forbearance exceeds $ 1,000.00. Otherwise, making a loan to any person in violation of subsections a.(1) and a.(2) of this section is a disorderly persons offense.
b. Business of criminal usury. Any person who knowingly engages in the business of making loans or forbearances in violation of subsection a. of this section is guilty of a crime of the second degree and, notwithstanding the provisions of N.J.S. 2C:43-3, shall be subject to a fine of not more than $ 250,000.00 and any other appropriate disposition authorized by N.J.S. 2C:43-2.
c. Possession of usurious loan records. A person is guilty of a crime of the third degree when, with knowledge of the nature thereof, he possesses any writing, paper instrument or article used to record criminally usurious transactions prohibited by subsection a. of this section.
d. Unlawful collection practices. A person is guilty of a disorderly persons offense when, with purpose to enforce a claim or judgment for money or property, he sends, mails or delivers to another person a notice, document or other instrument which has no judicial or official sanction and which in its format or appearance simulates a summons, complaint, court order or process or an insignia, seal or printed form of a federal, State or local government or an instrumentality thereof, or is otherwise calculated to induce a belief that such notice, document or instrument has a judicial or official sanction.
e. Making a false statement of credit terms. A person is guilty of a disorderly persons offense when he understates or fails to state the interest rate, or makes a false or inaccurate or incomplete statement of any other credit terms.
f. Debt adjusters. Any person who shall act or offer to act as a debt adjuster shall be guilty of a crime of the fourth degree.
"Debt adjuster" means a person who either (1) acts or offers to act for a consideration as an intermediary between a debtor and his creditors for the purpose of settling, compounding, or otherwise altering the terms of payment of any debts of the debtor, or (2) who, to that end, receives money or other property from the debtor, or on behalf of the debtor, for payment to, or distribution among, the creditors of the debtor. "Debtor" means an individual or two or more individuals who are jointly and severally, or jointly or severally indebted.
The following persons shall not be deemed debt adjusters for the purposes of this section: an attorney at law of this State who is not principally engaged as a debt adjuster; a nonprofit social service or consumer credit counseling agency licensed pursuant to P.L.1979, c.16 (C.17:16G-1 et seq.); a person who is a regular, full-time employee of a debtor, and who acts as an adjuster of his employer's debts; a person acting pursuant to any order or judgment of court, or pursuant to authority conferred by any law of this State or of the United States; a person who is a creditor of the debtor, or an agent of one or more creditors of the debtor, and whose services in adjusting the debtor's debts are rendered without cost to the debtor; or a person who, at the request of the debtor, arranges for or makes a loan to the debtor, and who, at the authorization of the debtor, acts as an adjuster of the debtor's debts in the disbursement of the proceeds of the loan, without compensation for the services rendered in adjusting such debts. |
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ramj70
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| Posted: Mon Jul 14, 2008 10:52 pm Subject: debt settlement |
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if i want to open a debt setttlemnet business in new jersey, what do i need to do
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chesky
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| Posted: Mon Jul 14, 2008 10:53 pm Subject: debt settlement |
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if i want to open a debt setttlemnet business in new jersey, what do i need to do
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chesky
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| Posted: Tue Jul 15, 2008 4:08 am Subject: |
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MorningStar, I'm from Indiana as well, so I'm curious as to what the answer will be here.. I've sent an email off to the Attorney General yesterday, so I'll let you know what they have to say about my little PDL problem.
I know the law information from Indiana says they are legal, however, the letter that I've seen (and been sending to the pdl companies) seems to verify that they illegal if they are not licensed in Indiana..
| Quote: | NOTICE TO UNLICENSED INDIANA LENDERS WHO ARE SOLICITING
BUSINESS IN INDIANA
Investigation by the Indiana Department of Financial Institutions (“Department”) has
determined that your company is among several unlicensed entities making or offering
consumer loans to residents of Indiana via the internet.
Depending on the type of loan being offered, your company is in violation of IC 24-4.5-
3-502 and/or IC 24-4.5-7-102. These statutes reference consumer loans, and/or Small
Loans (commonly referred to as “Payday Loans”) and require a license issued by this
office in order to make these consumer loans.
During the recently concluded session of the Indiana General Assembly, there was a
change to the statute governing the territorial application of the Indiana Uniform
Consumer Credit Code, including the Indiana Small Loan Act. Effective July 1, 2007, IC
24-4.5-1-201 requires internet lenders to be licensed, and to comply with Indiana law,
when making loans to Indiana residents. Additionally, IC 24-4.5-1-201( reads “If a
creditor has violated the provisions of this article that apply to the authority to make
consumer loans (IC 24-4.5-3-502), the loan is void and the debtor is not obligated to pay
either the principal or loan finance charge, as set forth in IC 24-4.5-5-202.”
You are advised to Cease and Desist the offering of these types of loans to Indiana
residents unless/until you have obtained the proper Indiana loan license. Consumers will
be advised that these loans are not in compliance with Indiana Statutes and that these
loans are considered null and void, and as a result, uncollectible. Additionally, the
Department may seek injunctive relief under IC 24-4.5-6 in the event of continued noncompliance.
All Financial Institutions operating within the state of Indiana will be advised that
electronic payment and / or paper/check transactions connected with these illegal loans
should be rejected if an entity is unlicensed. Consumers will also be advised on the
procedure to stop electronic debits to their accounts using return codes.
Questions concerning the acquisition of a loan license may be directed to this office.
Information is also available via our website at www.in.gov/dfi
Sincerely,
Mark B. Tarpey
Supervisor – Consumer Credit Division |
Do you think they purposely make this stuff difficult to understand? lol.
Thanks for all the hard work you guys have put into this. It's helped me out immensly!!!
Jen
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jennifer_bailey75
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| Posted: Tue Jul 15, 2008 7:37 am Subject: |
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I called and spoke with Dave from the Indiana DFI yesterday. He was really helpful. When I called I left a voicemail but he called back in 10 minutes. While we were on the phone I could hear his phone ringing almost the entire time. It sounded like he was used to getting calls about PDL's.
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WJoe
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| Posted: Tue Jul 15, 2008 7:46 am Subject: |
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Jen - This thread is really old. From last year - So I'ev gotten my answers . . . . What did you need to know?
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goudah2424
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| Posted: Tue Jul 15, 2008 7:52 am Subject: |
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Mostly I was just curious about what their take was on the whole thing. I think I've gotten all my answers as I've gotten my last PDL marked as PIF now.  Thank you for all your hard work and knowledge!!!!!
Jen
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jennifer_bailey75
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