West Virginia Moves to Regulate Online Payday Loans, Cash Advances
By Paul RizzoPayday Loan Writer
Despite the efforts of consumer advocates around the nation, the cash advance business has not seen much of a slowdown. A major reason for the continued popularity?
The extension of these resources beyond mere storefronts. Now, thanks to online payday loans, anyone with access to a computer can apply for quick money.
A number of states have passed laws trying to regulate payday lenders, who charge their customers exorbitant interest rates, by forbidding them from doing business in their states. The online lenders, however, seek out clever loopholes.
“All aspects and transactions on this site will be deemed to have taken place in our office in the State of Delaware, regardless of where you may be viewing or accessing this site,” reads the disclosure language on APPLE Fast Cash Personal Loans’ Web site.
“Borrower is responsible for complying with any local statutory obligations that may exist in their state or area with respect to any transactions with APPLE Fast Cash Personal Loans.”
Recently, West Virginia Attorney General McGraw filed suit to enforce investigative subpoenas against 14 Internet payday lenders and to enjoin their usurious lending activities in his state.
McGraw also announced that his office has reached formal settlement agreements with 18 other online payday loan lenders in which they promised to permanently discontinue their payday loans here and to refund all unlawful fees and charges collected from West Virginia consumers.
McGraw said the latter agreement will result in tens of thousands of refunds and canceled debts for hundreds of West Virginia consumers.
McGraw said the 14 Internet lenders made payday advances to consumers in their homes via interactive web sites and have claimed that states, including West Virginia, cannot regulate their lending activities. The state, he says, sees it differently. The defendants require payment of interest with Annual Percent Rates (”APR”) ranging from 600 to 800 percent APR.
The State of West Virginia has a maximum allowable rate of 18 percent APR for consumer loans.
