Study Reveals Majority of Payday Loan Lenders are Unlicensed or Unregulated
By J.J. CameronPayday Loan Writer
It's a growing problem in the world of payday advances: unlicensed lenders. It's led to lawsuits in other states, such as California, and it's now causing an issue in Arkansas.
A new study on payday lending practices in the state says fewer than 25 percent of payday lenders are actually licensed for payday loan approval. Those that are, the report claims abuse state regulations and cost consumers millions.
The study is called Payday Lenders in Arkansas: The Regulated and the Unregulated. It was conducted by a group called Arkansans Against Abusive Payday Lending, a coalition that's seeking to ban such businesses focusing on instant payday loans in the state.
Coalition president H.C. Klein said that, although the Arkansas Constitution limits interest rates on consumer loans to 17 percent annually, some payday lenders specialize triple digit annual interest rate loans.
The research says 275 payday lenders were operating in Arkansas as of February. Of that number, a mere 66 are licensed and regulated by the Arkansas State Board of Collection Agencies. According to the study, 70 others are licensed, but make unregulated payday loans due to the agency's interpretation of state law.
March 17th, 2006 at 9:45 am
[…] An industry supporter told lawmakers that better regulation, not eliminating the practice in Arkansas, was the answer. […]
March 24th, 2006 at 3:23 pm
[…] A former deputy prosecutor, Turner said the prosecutors consider them promissory notes rather than hot checks. The payday loan lenders can go after their clients for civil penalties, but not have them charged with a criminal offense. “They (the lenders) prey on the uninformed and uneducated,” Turner said. […]