Payday loans are back in the California news with San Francisco city officials looking for victims of two payday stores. The city brought a lawsuit against two payday lending stores back in 2007 and now have up to $7.5 million to return to the victims. The reimbursements could range anywhere between $20 and $1800 to repay those who were charged exorbitant and excessive fees, interest and fines.
The city is now on a search to find the claimants on the settlement. There has been a deadline set for October 1, 1012 to find the people. If you took out loan with Money Mart or Loan Mart in 2007 in San Francisco, the city will be looking for you. It is important to get the word out in order to track down as many victims as possible.
The two companies involved in the lawsuit will also have to pay the city of San Francisco $875,000.
These companies still have at least ten branches open in San Francisco, a city running second to Seattle in payday loan density. The pursuit for predatory lenders has led the city to create city-backed financial options, Bank on San Francisco and Payday Plus.
Anyone who obtained short-term payday loans from these companies in San Francisco between 2005 and 2007 are eligible to receive a portion of the settlement.
This information may apply to you, a family member, a friend, co-worker, or a member of the community. Spreading this news to the masses will get someone who knows something about one of the victims.
State regulations now prevent payday loans lenders from abusive practices:
* All payday lenders in California must be licensed by the Department of Corporations.
* Loan amount is capped at $300
* Maximum fee for your loan is 15%
* A lender cannot process a new loan to pay off an existing loan.
* A new loan cannot be processed with the same company when there is an outstanding loan due.
* Up to %15 may be charged for a returned insufficient payment. Your bank may charge additional fees.
* A payday lender may not threaten to prosecute you in order to collect on your loan.
Since 2007, these laws have changed the way payday loan lenders work. Storefront lenders and direct online payday loans lenders have had to change their practices and work within the state guidelines. Lawsuits such as the one above have happened all over the country. In fact, there are still some predatory lenders who are trying to skate by the regulations but finding themselves at the hands of the court when complaints against their practices are filed. Many states are continuously trying to add more regulations or ban payday loans all together to protect the residents' rights. Many groups argue that banning these loans are actually taking away a borrower's right to choose which has kept some extreme regulations from occurring. There are offshore lenders and Native American tribe based lenders who do not have to follow state regulations. Banning them altogether may limit how many people use payday loans for fast cash, but it will not get rid of all access to predatory lenders. These lenders are able to offer much higher loan amounts and will charge even higher rates. Those who are in a vulnerable financial state and who do not have other money choices, will be falling into the hands of these predatory lenders.