“California’s online payday loans attacked”, and rightfully so!
The kind of headline I love seeing. California is joining in the fight to eliminate illegal online payday loan companies, but there are so many of them to shut down, the fight may last a while.
It seems to be a battle between state laws and the ability for online lenders to completely disregard those laws and drain their clients offline bank accounts with huge fees and multiple loans.
What is happening?
California’s Commissioner of Business Oversight Jan Lynn Owen has sent out notices to all of its banks and credit unions warning them about doing business with unlicensed online lenders in the state.
There is a good chance they are breaking California’s lending laws by allowing access to customers bank accounts by these companies.
They need to push the red stop button on this kind of activity, and do it now.
Any lender doing business in the state of California must follow all of its lending laws, regardless of where it is based.
Many of these companies are based out of state, some even in tax havens offshore, or partnered with Indian tribes.
Regardless of where they base their business if they are doing business in California they must follow the laws.
Giving the banks notice that they could be breaking the lending laws might just get them to stop allowing access to these companies, and take the bottom out of these unlicensed lenders.
How can they operate if the are illegal?
We have all seen the ads, the promise of instant cash in your bank account, and no credit checks. All you need to do is have a checking account and make $800.00 a month.
Online lenders take out a finance charge directly from your bank account every time you get paid.
For example, a $500.00 loan for two weeks will cost you $150.00 and be taken out directly from your account, but only the interest, nothing on the principle, unless you set it up in advance to pay down on the loan.
This could go on forever and they call it a payday loan trap fro a reason, it is a trap.
Summary
While New York and other states are doing similar actions to combat these lenders, there is plenty the individual can do to protect themselves from getting caught in the payday loan trap.
- Do not use the loan roll over by just paying the interest
If you are caught up in the payday trap right now call us at 1-877-280-5100 or fill out our form for a free no obligation quote on how we can help you get out of this nasty trap!
Good common sense will go a long way to keep you safe from these predators. Are you ready to take action?
