Payday Loan companies have regulations imposed on them in multiple states that these lending companies are required to follow. In Massachusetts, for example, any company giving out a consumer loan for $6,000.00 or less at an annual rate of more than twelve percent has to be licensed with the Massachusetts Division of Banks. This is pursuant to the Massachusetts Payday Loan Regulations (M.G.L. c. 140, §§ 96 through 113; 209 CMR 26.00). Lenders need to be licensed, or their loans are deemed wholly void.
If the lender is licensed, then in order to give out a valid and legal payday loan to a consumer, there are still a good number of rules that they have to follow. For example:
b) The loan cannot charge an administrative fee of more than $20.00 per year;
c) Loans more than a year overdue cannot charge an annual interest rate of over 6%;
d) The first payment date cannot be more than 1 month and 15 days after the date of the loan;
e) If the loan is paid back in full in before first payment is due, then the consumer has to receive a refund or credit;
f) Late fees can only be assessed if a payment is 10 days late and can only be 5% of what the payment should have been or $5.00, whichever is less;
g) A bounced check fee cannot be more than $10.00; and
h) If a lender makes an agreement to allow deferral of payment(s), then the lender may not charge a deferral fee unless, (1) all late fees are forgiven and, (2) the consumer is provided with necessary disclosures.
If the payday loan lender is licensed but overcharges the consumer in regards to the loan in the manner described above, the consumer can sue to have the loan modified or cancelled.
However, as mentioned above, if the lender is unlicensed, then the loan is wholly void.
Regardless of licensure, if the rules regarding payday loans are not followed in Massachusetts, the consumer can sue for a refund of illegal overcharges plus twice their legal costs.
If you feel that you are the victim of excessive charges from a payday loan lender, or that you received a payday loan from a lender who is not licensed with the Massachusetts Division of Banks, or if you are in another state and think that you received a payday loan from a lender who is not following the rules of your state in regards to payday loans, please contact our firm so that we can hear your story, and do a free and quick case review. If you are in another state and our Of Counsel cannot help you, even though it is not our obligation to do so we will try to direct you to a law firm that might be able to help you.
We would love to see what we can do to help, as many Massachusetts residents, and also, many citizens and residents around the country have been victimized by these payday loan lenders who subject people to excessive charges; preying on individuals who are just trying to make ends meet and support themselves and/or their families. Our firm does not find that acceptable in the slightest.