Payday loans are not allowed in pennsylvania.
Date: Thu, 06/14/2007 - 17:21
PA's laws are tricky. If the internet pdl is licensed to loan in
PA's laws are tricky. If the internet pdl is licensed to loan in their state then they can loan to you, BUT they must follow the cap rates. You should do your research if these are internet pdl loans, because you will find that some are not even licensed in the states they are located. You need to file complaints with your state's AG's office. And you can escape this trap, give us a little more info. on which companies you are dealing with and how long you have been paying on these loans.
Also, these companies loan in states where they are illegal and
Also, these companies loan in states where they are illegal and in most states without a license. They get away with it because people don't know they are operating illegally and don't file complaints.
If you talk to the PA Dept of Banking they will tell you that th
If you talk to the PA Dept of Banking they will tell you that the companies can be licensed in another state, and should be following the laws of the state they are licensed in. Here is an email from James Keizer, the guy that is in charge of regulating pdl's in PA.
Quote:
Emails to and from PA Banking Dept Hello, I have a question about payday loans in Pennsylvania. Does the small loan rate cap of $9.50 per $100 per year discount or 24% per year apply to these loans? I took out a few on the internet and am trying to figure out how much I legally need to pay. For instance on a $200 loan would I be legally responsible for paying back only $248? Thanks! Reply Dear Ms.: The 9.5 discount and the 24 % simple interest refer to calculations that can be used by companies that are operating in Pennsylvania and are licensed under Pennsylvania????????s Consumer Discount Company Act. With a number of exceptions, a lender that is located inside of Pennsylvania and who does not have any special lending authority (i.e., a special license or charter) who is making smaller loans not secured by real estate can only charge interest at a rate of 6% simple. A lender that does not have a physical presence in Pennsylvania but who has lending authority from some other state can generally charge the interest rate and finance charges allowed by that other state. The Department may or may not be reviewing this policy and I would not count on this e-mail as an interpretive opinion before starting any lending or business operations. James Keiser | Administrator Non-Depository Institutions 17 North Second Street, 13th Floor | Hbg PA 17101 Phone: 717.783.8242 | Fax: 717.787.8773 jkeiser(at)state.pa.us | www.banking.state.pa.us |
Also, if you go to the dept of banking's website, click on laws and regulations, and then interpretive letters, there is a letter there that explains more in detail about how internet based companies that are not physically located in PA are allowed to operate.
