Payday Lending News
The latest news on payday loans and the payday lending industry from the Center for Responsible Lending.
- Four Oaks Bank Agrees to $1M Fine to Settle DOJ Suit
WRAL.com 09 Jan 2014
In North Carolina, Four Oaks Bank has agreed to pay $1.2 million to settle accusations that it and its parent company allowed illegal activity in its accounts tied to payday lending. The proposed deal -- which still needs court approval -- requires the bank to help federal authorities in possible criminal investigations of its executives, board members, and customers.
- Davis Calls on Cash America Exec to Step Down From State Commission
Fort Worth Star-Telegram 30 Dec 2013
In Texas, Sen. Wendy Davis (D-Fort Worth) has called for Cash America executive William J. White to resign as chairman of the Finance Commission of Texas, a state panel with authority over lending institutions. Davis spoke out after an article in the El Paso Times quoted White as blaming borrowers, rather than payday lenders, for getting caught in a cycle of debt with the high-interest loans. She said that White’s 2009 appointment to the commission was a “blatant conflict of interest” and noted that Fort Worth-based Cash America recently settled alleged abusive practices with the federal Consumer Financial Protection Bureau
- Lac du Flambeau Chippewa Enter Payday Loan Business With Eye to Online Gambling
Milwaukee-Wisconsin Journal Sentinel 29 Dec 2013
About two dozen Native American tribes have launched short-term online lending operations and are also considering online gaming. Barry Brandon, executive director of the Native American Financial Services Association, says that some of the legal and political battles that tribes fought over Indian casinos are now being fought over online lending.
- TIOR Capital Agrees to Forfeit $1M in Outstanding Loans
Riverside Press-Enterprise (CA) 26 Dec 2013
Authorities in California have reached a settlement with TIOR Capital, which offered unlicensed payday loans online to consumers across the state through its Nevada-based affiliates.
- Predatory Lenders Skirting Arizona's Payday Loan Law
Azcentral.com 19 Dec 2013
Arizona voters banned payday lenders in 2008, but some predatory lenders have been able to dodge the law and persist in their harmful credit practices, writes Rep. Debbie McCune Davis, a Democrat who represents Legislative District 30. Consumers in the state continue to be targeted by auto title lenders that charge triple-digit annual interest and claim to offer a quick financial fix that can actually evolve into a long-term financial problem.
- Federal Consumer Agency Sues Over Online Loans
New York Times 17 Dec 2013
On Dec. 16, the Consumer Financial Protection Bureau (CFPB) sued online loan servicer CashCall Inc., two related companies, and owner J. Paul Reddam to stop them from demanding payment for costly loans. The servicer managed loans that came with terms that often included triple-digit interest rates.
- Caldwell ID Approves Tighter Restrictions on Payday Lenders
Boise Weekly 17 Dec 2013
An ordinance stipulating where payday loan operations can set up shop in Caldwell, Idaho, has sailed through a city council vote with no objections. Under the measure, the businesses will be limited to manufacturing or light industrial zones and banished from commercial areas.
- Loan Amounts Can Snowball When Payday Lenders Sue Borrowers
St. Louis Post-Dispatch 14 Dec 2013
Lenders that make payday, auto title, and installment loans file suits against customers for non-payment tens of thousands of times annually. In Missouri alone, these lenders file more than 9,000 suits a year, according to an analysis by ProPublica. The court system is often biased on the lenders' side, making litigation profitable for them and increasing the costs for borrowers. These loans come with annual interest rates that range from about 30 percent to 400 percent or more. In some states, after a suit results in a judgment, the debt can continue to add up at a high interest rate.
- New York Subpoenas Websites in an Effort to Curb Payday Lenders
New York Times 03 Dec 2013
New York Superintendent of Financial Services Benjamin Lawsky recently sent subpoenas to 16 lead generator websites that sell sensitive consumer data to payday lenders to gather information about the websites' practices and connections to the lenders. This comes after Lawsky sent cease-and-desist letters in August to 35 online lenders for writing loans that violate state usury caps.
- Decatur Wants to Tighten Restrictions on Payday Lenders
WAFF.com (Alabama) 02 Dec 2013
The City Council in Decatur, Ala., is considering a zoning ordinance that would limit where payday lenders can set up shop. It also has drafted a resolution calling on lawmakers to cap payday loan interest rates, which often top 200 percent or even 400 percent on an annualized basis, and continues to push for legislation at the state level that would require lenders to report loans to a database to ensure compliance with the $500 limit.
- Pay Day Lending – Ending a Vicious Cycle
Houston Chronicle 02 Dec 2013
The mayor of Houston, Texas, is pushing for a payday lending ordinance that would restrain and regulate these types of lenders in the city. Such businesses often take advantage of the poor and vulnerable to generate large profits, writes Mustafa Tameez in an editorial.
- Ditching Compromise, Parker Pushes Tough Payday Loan Regulations
Hispanic Business 23 Nov 2013
Houston Mayor Annise Parker has thrown out a compromise plan to regulate payday and auto title lenders, instead promoting stricter measures to limit this type of financing. The city council will vote next month on the regulations, modeled on rules passed by other Texas cities that include Dallas, Austin, San Antonio, and El Paso
- Service Members Left Vulnerable to Payday Loans
New York Times DealBook Blog 22 Nov 2013
The Military Lending Act was enacted nearly seven years ago, but some say it has gaps that leave hundreds of thousands of U.S. service members open to potentially predatory loans. Congress passed the law to shield service members from loans with double-digit interest rates that can get borrowers deep into debt. Critics, however, say the law has not kept up with high-interest lenders that operate either online or near bases.
- Fresno Pushes Payday Loan Limits, Critics Stress Financial Dangers
ABC - KFSN Fresno (CA) 21 Nov 2013
There are 66 payday lenders already licensed to do business in Fresno, Calif., so officials there are taking steps to check the local growth of such companies -- which state regulators say charge annual interest rates of about 460 percent.
- Payday Lender Cash America Fined Over Claims of Robo-Signing, Gouging Military Members
Washington Pos 21 Nov 2013
The Consumer Financial Protection Bureau (CFPB) has reached a $19 million settlement with payday lender Cash America over abusive practices such as "robo-signing," in which employees stamped a lawyer’s signature on court documents used to sue borrowers for past-due debts. This tactic, according to the CFPB, helped the company improperly make money from at least 14,397 U.S. consumers. The settlement with Cash America is the CFPB's first with a short-term, small-dollar lender. The agency also found cases in which Cash America charged active-duty service members and their families more than the 36 percent interest rate limit set by the Military Lending Act.
- Jay Blasts 'Scumbags' Who Prey on Veterans
Charleston Gazette (West Virginia) 20 Nov 2013
Because they are at high risk of predatory or fraudulent lending and debt collection, enlisted persons should be wary of high-pressure sales, said witnesses at a U.S. Senate Commerce Committee hearing on Nov. 20. Sen. Jay Rockefeller (D-W.Va.) called the meeting to address why military members have higher credit card debt and why they are more likely to use high-interest loans such as payday lenders.