Texas - Are there such things as illegal payday lenders?

As payday lending is legal in Texas, I guess internet payday lending is also legal. However, not all lenders are licensed to operate in every state. If your payday lender does not have license to operate in Texas, then you won't have to worry about the complaint that you've filed.

If you have not found it, Texas Finance Code Section 393 covers the Texas Laws that cover CSOs.

I too am a resident of Texas and called the Texas AG office, just yesterday. I got told basically the same thing when I asked if any lender that makes loans in Texas must be registered as a CSO and what affect is there if they are not registered.

My take on it from the way the answer I got from the AG is the AG's office is not quite ready to take a hard stance on payday loans that originate on the Internet.

However, I also got told that the Texas Legislature currently has 4 bills that deals with payday loans. But, I do not remember what aspects they were concerning. Maybe some consumer help is coming for Texans.

Here's the deal. In order for a payday lender to legally operate in Texas, the company has to register as a credit services organization. They have to post a bond and pay a small fee. You can check on the Secretary of State website to see whether they are registered. If not, they are illegal. The AG doesn't want to go after them because they are pretty powerful in Texas (home of Ace Cash Express) and the law doesn't state specifically what the penalties are. If you want to look up the pending legislation, go to the State of Texas website and do a bill text search, using the terms "credit services organization."

I just looked it up, and there are actually 16 bills that have been filed pertaining to CSOs. I hven't had the time to look all of them up, though.

Maybe I am wrong, but from what I gathered the above is partially correct. I'm pretty sure PDL have to have a license to opererate in TX as a PDL, the work around is they can register as a CSO whcih does not fall under the PDL regulations and guidelines and can basically do as they please. I sent some nasty emails today anyway, saying they were illegal. If they send back proof they are not then i guess I'll talk with then more.

Oh, I had called the AG today as well...was reffered to the legal dept but still waiting on a call back. I want to find out more info on all of this as well.