MyCashNow
Date: Sat, 01/26/2013 - 13:53
As I am in New York, the amount of interest they charged was illegal.
Because I paid the loan off, I can borrow from them again. I'm toying with an ethical choice I guess - do I borrow another $100 from them and then refuse to pay it back because the loan is illegal, just to get my money back? I'd even be willing to send them back the $40 difference to square the accounts. I suspect this would be my only way to get my money back, as I doubt they would send me a refund.
Anybody done anything like this before?
Payday lending is prohibited
Payday lending is prohibited in NY. All lenders are illegal in your state. You can ask them for a refund. But it fully depends on their discretion whether or not to return back your money.
In no way arguing - just
In no way arguing - just pointing out the facts that I have been able to find.. last one and I will consider this matter closed to myself... this is from the New York State Department of Financial Services Website -
"Avoiding Dangerous or 'Predatory' Loans
Payday Loan
Payday loans are illegal in New York State. A payday loan is a relatively small (usually under $500), high interest, short-term loan."
Maybe they are unclear on what is legal and what isn't also...
From the New York State
From the New York State Banking Division - just to know what is right and wrong...
"June 13, 2000
To the Institution or Organization Addressed
Re: Payday Loans
Since issuing an All Institutions letter regarding payday loans on June 29, 1999, the Banking Department has become aware that banks and other companies are continuing to advertise and offer these loans in New York State. Payday loans are typically made at usurious rates of interest as described below.
As both a preventive measure and an effort to elicit additional information from consumers, we are taking this opportunity to once again clarify the Banking Department’s view of certain practices pertaining to payday lending.
In order to make payday loans in New York, an entity must be either a bank or it must be licensed as a small loan company. No entities licensed by the Banking Department engage in this particular type of business in New York. However, out of state companies are making this type of loan.
Just recently, the New York State Banking Department contacted one company, that is neither a bank nor a licensed lender. This company had been offering payday loans in New York State and has now agreed to immediately cease taking applications for payday loans from New York State residents.
Non-bank companies that offer payday loans in New York, even if licensed as a Licensed Lender under Article 9 of the Banking Law, may not charge an annual interest rate that is in excess of 25%. Banks that offer these loans may export the interest rate permitted in their home state. Banks are permitted by federal law to offer a single maximum rate of interest to customers across the United States. However, banks that choose to offer this type of loan product at exorbitant interest rates are blatantly abusing this authority. These types of actions, when judged in the court of public opinion, can lead to a groundswell of outrage resulting in reputational harm and safety and soundness problems.
Payday loan companies typically grant advances to individuals against their next paycheck. In return for the advance, the company typically charges a "fee". For example, for a fee of $35, a payday loan company might agree to make the borrower a two-week advance of $120. In order to obtain the loan, the borrower would agree to write the company a check for $155 that the lender agrees to hold until the borrower’s next payday. If funds are still insufficient to cover the check once the borrower’s paycheck is deposited, the payday loan company might agree to renew the loan for another period, thereby resulting in additional fees for the borrower.
As illustrated above, payday lenders typically charge high "fees" for their services. It should be noted that if the loan advanced results in an annual interest rate in excess of 25%, then a New York lender would be in violation of §190.40 of the New York State Penal Code. Furthermore, it is the Banking Department’s position that any and all charges to the borrower to obtain the loan, irrespective of how they are identified, constitute interest and are subject to the 25% limitation. Violators of this provision will be vigorously prosecuted.
If you have any complaints, concerns or questions regarding the issuance of payday loans in New York State, or if you have obtained this type of a loan in New York State, please contact the Banking Department’s Consumer Hotline at 1-800-522-3330. We appreciate your attention to this matter.
Sincerely,
Superintendent of Banks"
Right, that's the post I
Right, that's the post I provided the link to above. NYS Banking Dept says that payday loans could be legal in NY, just that none of them are -- exactly what I've been saying all along.
Take a look, for example, at the start of the third paragraph: "In order to make payday loans in New York, an entity must be either a bank or it must be licensed as a small loan company." It doesn't say payday loans are illegal. It sets the conditions for them to be legal.
New York Payday Loan Laws
New York Payday Loan Laws
State Legal Status
Lending of payday loan is considered prohibited in the State of New York.
Interest rate cap on small loans
25% per annum
File your Complaint and get Information
Regulator - New York State Banking Department
Address - One State Street New York NY 10004
Phone - 1-877-BANK-NYS
Regulatory Contact - Regina A. Stone Deputy Superintendent
Everything in this post
Everything in this post agrees with what I've said, that it is a matter of overcharging interest, except the last, conclusory sentence, which was a statement from a consumer advocacy group, not NYS.
If you want to keep arguing NYS law with an attorney licensed to practice in NYS, that's fine. But everything I've said here is true. Payday loans are not per se illegal in NY state. It's just that no payday lender is willing to abide by the law.
What you are suggesting is
What you are suggesting is theft, given the fact that it is premeditated and intentional. In other words, this would be considered illegal. And it is not just about breaking the usury rate, PDLs are are simply illegal in NYS.
Source for your statement
Source for your statement that pay day lending is "prohibited"?
There is no NY law that prohibits payday lending. As stated, all lenders must be registered and there is a 25% annual cap on interest. But if there was a registered payday company that only charged 24.99%, it would NOT be illegal.
hold on
quit muddying the waters colonel.no pdl,cash advance,or installment loan has that low an interest rate so no loan would be legal.btw click the USA padyday loan laws to see what helpinaz posted.again quit trying to muddy the topic.no loan would be legal under those laws.in fact show me any lender with an interest rate that low.do that and i''ll layoff.if not then again stop it!!!!!!!
also found this tidbit for
also found this tidbit for you from an article from July of this last year.. "According to the Consumer Federation of America, only 18 states ban or strictly regulate payday loans. New York's ban is one of the nation's toughest. Whether they're made online or at a strip mall, loans with triple-digit APRs (annual percentage rates) violate the state's 1976 usury law, which caps rates at 16 percent. The state lacks the power to regulate commercial banks — such as Bank of America, Chase, and Wells Fargo — who are overseen at the federal level and allowed to charge 29 percent or more on credit cards. But payday lenders are considered non-banks, so licensing and regulation fall to the states. Any non-bank lender who charges more than 16 percent interest in New York is subject to civil prosecution; charging above 25 percent can subject lenders to criminal penalties. First-degree criminal usury is a Class C felony that carries a maximum sentence of 15 years."
"It was a paralegal at the Neighborhood Economic Development Advocacy Project (NEDAP) in Manhattan, an advocacy group that opposes predatory lending, who finally told Bradley that none of these lenders should have been able to charge Bradley such high rates or touch the money in his bank account. Payday loans are illegal in New York State. "
Not muddying the waters,
Not muddying the waters, going for accuracy. If someone says that PDLs are illegal per se in New York, they are saying something inaccurate and that cannot help when negotiating with these guys. You have to be factually accurate.
If you live in NY State, you should object based on the fact that the loan they made you constitutes a criminal offense, not that PDLs are illegal in NY.
I couldn't care less what someone else posted here. I cited to an official website from the State of New York that supports what I am saying here. If you want to keep spreading incorrect info, that's on you.