Exploiting Legal Loopholes
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Arizona: Payday Lenders Skirted State Law by Changing to Title Loans — Often Without Requiring a Title
After Arizona instituted a payday loan law, over 200 payday businesses in the state converted themselves to title lenders.
Florida: Payday Lenders Skirted Regulations by Claiming to Be Credit Service Organizations
Payday lenders in Florida claimed they were credit service organizations not subject to Florida’s payday lending law.
South Carolina: Payday Lenders Bypassed Regulation by Calling Themselves “Supervised” Lenders
South Carolina payday lenders bypassed state laws that limited the number of payday loans a person can take out.
Minnesota: Payday Lenders Bypassed Regulation by Calling Themselves Industrial and Thrift Operations
In Minnesota, payday companies obtained licenses as industrial loan and thrift operations to avoid law capping payday loans.
Maryland: Payday Lenders Skirt Regulation by Adding a “Broker Fee”
Maryland had to amend its payday lending law that capped interest rates after payday lenders started charging a separate “broker fee.”
Virginia: Payday Lenders Skirted Regulation by Offering Open-Ended Credit Lines
After Virginia passed law cracking down on payday loans, lenders began offering open-end credit lines.
New Mexico: Payday Lenders Bypassed Regulations by Calling Their Loans Installment or Signature Loans
After a 2007 New Mexico payday loan law passed, lenders moved to installment loans.
Illinois: Payday Lenders Bypassed Regulation by Lengthening the Term of the Loans They Provided
Illinois passed law regulating loans with terms less than 30 days; payday lenders bypassed the law by making their loans 31 days.
Delaware: Payday Lenders Bypassed Regulation by Calling Themselves Installment Lenders
Delaware’s payday loan law that limited the number of loans borrowers could take out in a year was bypassed by lenders.
Ohio: Payday Lenders Skirted Regulation by Calling Themselves Mortgage Lenders or Credit Service Organizations
Ohio lenders ignored rate caps and continued to issue payday loans under mortgage or other lending licenses that were never created for that purpose.