California Payday Loan Firm Pays Over $900,000 to Settle Lawsuit - OppLoans

California Payday Loan Firm Pays Over $900,000 to Settle Lawsuit - OppLoans California Payday Loan Firm Pays Over $900,000 to Settle Lawsuit California Payday Loan Firm Pays Over $900,000 to Settle LawsuitInside Subprime: March 7, 2019By Aubrey SitlerA California  check-cashing servicer, title loan, and payday loan firm, paid over $900,000 in January to settle allegations of predatory practices. While they never publicly admitted to any wrongdoing, the settlement came in the face of claims that they steered customers into taking out high-interest loans in a way that curbed legal requirements, in addition to engaging in other illegal practices.Payday loans in California are capped at $300 per loan, and California law imposes a maximum interest rate of 15% for any payday loans and between 20-30% for other loans totaling $2,499 or less. However, state examiners allege that between 2012 and 2017, the payday loan firm steered borrowers to take out loans of at least $2,500 to avoid those lower loan and payday loan rate caps.The settlement resolves allegations pertaining to false advertising that failed to communicate to consume rs a $2,501 minimum loan, as well as those that the company collected charges from consumers twice, deposited borrowers’ checks before the date they were supposed to (i.e., before the payday on which the customer was able to pay off the loan), and approved multiple loans at once per borrower.$800,000 of the total amount paid will be refunded straight to consumers including about $700,000 that will go to about 3,000 payday loan borrowers while another $105,000 went toward penalties and other costs associated with a consent order with the California Department of Business Oversight. With the consent order, the payday loan firm must complete an audit of all current loans to determine where refunds are due. The company must report to the state on that audit within 30 days and refund customers within 90 days.This settlement is part of a larger effort by the state-level Department of Business Oversight to reel in and censure predatory lending practices in California, all with the end game of protecting consumers. As Jan Lynn Owen, the commissioner of the Department, said to the LA Times: “Steering consumers into higher-cost loans to circumvent statutory interest rate caps is abusive… Consumers deserve protection and access to lending markets that are fair, transparent and comply with the law.” Since 2017, the Department has made similar settlements with four other payday loan firms allegedly pushing customers to take out loans over $2,500 to avoid interest and fee rate restrictions.Even as the federal Consumer Financial Protection Bureau (CFPB) moves to lessen payday loan regulations by removing the ability-to-pay requirement, states are still permitted to enforce stricter rules and regulations. In 2018, the California legislature considered new laws that would crack down on predatory lending practices by imposing maximum interest rates on larger loans and on title loans, capping the number of loans an individual could have at one time, and extending the m inimum length of payday loans. However, all of the proposed bills died in the legislature.For more information on  payday loans, scams, and  cash advances  and  check out our  city and state financial guides  including  Anaheim,  Bakersfield,  Chico,  Fresno,  Los Angeles,  Modesto,  Oakland,  Redding,  Riverside,  Sacramento,  San Diego, San Francisco,  San Jose,  Santa Barbara,  and  Stockton.Visit  OppLoans  on  YouTube  |  Facebook  |  Twitter  |  LinkedIn