Really Confused
Date: Wed, 09/29/2010 - 12:54
SEE BELOW
We are in receipt of your email concerning the activities of payday lenders not licensed nor registered in Texas.
First, as indicated, the organizations you discussed are not licensed by our Office. We do not have licensing authority over out-of-state or non-Texas institutions. This Office regulates the activities of non-depository financial companies, motor vehicle installment sales and pawnshops in Texas. Second, by state statutes, I can not provide legal advice or legal-type opinions. If you need credit counseling assistance, I would suggest that you locate a credit counseling service near you. A good site to find this information is www.nfcc.org. Either click on the "Find a Counselor" or call the 800 number for assistance.
We have reviewed numerous contracts concerning out of state pay day lenders. Based on a review of contracts that have been provided to this Office, these lenders are utilizing the statutes, rules and regulations of various states or countries, i.e. Nevada, Utah, Costa Rica or Malta. This is known as ???Governing Law??? and is stated in a paragraph or clause in the contract. As such, these lenders are allowed to export the rates of those particular states or countries into Texas. So long as the organizations are operating within the guidelines of federal statutes (federal statutes preempt state statutes) or under the guidelines of the states in which they are incorporated in, then the organizations are free to operate within the boundaries of every state.
You would need to review your contracts in order to determine if you have the ability to alter the original agreement or to have the loans marked paid in full. As to collection, unless the collector is a third party collector, they must abide by the Texas Finance Code, Chapter 392 - Debt Collections or under the federal statute, the Fair Debt Collections Practices Act (FDCPA). The FDCPA is under some authority of the Federal Trade Commission (www.ftc.gov). I have attached information for your review.
Thought PDL had to be licensed in Texas to be a legal loan? Wha
Thought PDL had to be licensed in Texas to be a legal loan? What is this person saying? If they are not licensed, the loan is illegal. You live in texas, those are the laws you must follow, not the laws of Malta or Costa Rica.
I'm wondering what the wording of the Texas law is and whether t
I'm wondering what the wording of the Texas law is and whether the OCC is following an interpretation of their office as opposed to something the AG said. For example, in my state the law reads in order to loan to a resident of AZ a lender must be licensed. If the Texas law is more vague, perhaps the OCC is interpreting it to mean as lond as the lender is licensed somewhere they are good? I would check with the Texas AG office's consumer affairs department for an actual, legal interpretation of the state of the law.
UPDATE: I contacted the Attorney General's Office to see if the
UPDATE: I contacted the Attorney General's Office to see if they could clarify for me how it works when a lender is not licensed in Texas and to clarify what the OCCC had told me.... that as long as they are following federal statutes that the illegal ones can operate within the boundaries of any state and I am bound by their governing laws of the contract. All I got was a response that they cannot give legal advice or interpretation of the laws and gave me a link to a lawyer referral site. Very frustrating because no matter which state agency I contact, I get vague answers. I'm just trying to verify that if a lender is not licensed in Texas, am I still bound to the contract and the laws of their state or country or if I am protected by Texas law. The OCCC made it seem that the illegal lender is protected because I signed the contract agreeing to their "Governing Laws". Has anyone gotten a straight answer from a Texas agency that says if they are not licensed then I am only responsible for the principal? I borrowed 625.00 from MYPAYDAYLOAN.COM and I have paid over 2000.00 in rollover fees in the past year. I paid ONECLICKCASH 1521.00 on a 600.00 loan and 750.00 to USFASTCASH for a 500.00 loan. I feel I have more than paid back the principal.
I would continue to tell these lenders that your state law preva
I would continue to tell these lenders that your state law prevails. They are in another country for pete's sake and they've collected a LOT of money from you. I wouldn't give in.