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Payday Lending Forums in Syracuse and Long Island - click here What is going on in New York regarding Payday Lending? CFA, NEDAP, NYPIRG Payday Lending Forum- On October 23, 2003, over fifty concerned New Yorkers including college students, representatives of community organizations and credit unions attended a forum on the battle to keep payday lending out of New York. Jean Ann Fox of the Consumer Federation of America opened the event with a powerful speech describing the evils of payday lending and giving a national perspective on its prevalence and danger for consumers. Representatives from the Attorney General's Office and the New York City Council were also in attendance to describe what they are doing with regard to payday lending (see below). The forum ended with a strategy discussion on how we can continue to fight off payday lenders in New York. Attorney General's Lawsuit - On September 24, 2003, Attorney General Eliot Spitzer sued a Delaware-based bank and two out-of-state financial companies for operating a "payday" loan scam that saddles middle to low income New Yorkers with huge debt. The Attorney General's complaint names Cashnet, Inc, based in Elkins Park, Pennsylvania; TC Services Corporation d/b/a Telecash, based in Bala Cynwyd, Pennsylvania; and County Bank of Rehoboth Beach, Delaware in an elaborate scheme to circumvent New York State laws. According to
the complaint, Cashnet, and Telecash used County Bank as
a vehicle through which they make payday loans to New York consumers.
A state-chartered bank like County Bank can charge interest throughout
the United States at any rate permitted in its home state; Delaware's
law does not limit the amount of interest its banks can charge. The
Attorney General's investigation uncovered that County Bank was the
lender in name only. Both Cashnet and Telecash provided the capital
to market, advertise, originate, service and collect the payday loans.
Cashnet and Telecash also charge high fees for extending repayment dates
for those consumers who cannot afford to repay the short term payday
loan on its original due date. Int. 461 - would require the clear disclosure of loan terms to anyone entering into a payday loan arrangement. Int. 462 - would require clear and conspicuous disclosure in payday loan advertisements regarding material information, such as interest rates and other charges. Res. 871 - Resolution - calling upon the United States Congress to pass and the President to enact legislation to amend the current federal banking laws in order to better protect consumers from the dangers of payday loans. Res. 876 - Resolution - calling upon the New York State Legislature to pass A.3480, to prohibit foreign banking corporations from issuing payday loans. Res. 880 - Resolution - calling upon the Metropolitan Transportation Authority and its subsidiaries to stop the practice of leasing advertising space to businesses providing payday loan services, and in the alternative, that the Metropolitan Transportation Authority require payday loan companies to disclose pertinent information in their advertisements. The Councilmembers opened the hearing by stating that the Council does
not have authority to outlaw payday lending outright, but they have
put together a package of Intros and Resolutions to help New Yorkers
in any way they can. Click here to view the testimony delivered at the Hearing by a NYPIRG representative Upcoming Forums - NYPIRG will be holding two conferences on payday lending this spring: Long Island Click here to sign up for one of these forums
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