Payday loans st paul mn - Raytown
Tillman’s job as a late-night security guard in Houston had paid $9 an hour, and by picking up extra shifts, Tillman could just afford rent, groceries and other bills. But in 2008, amid the economic collapse, the security company scaled back overtime shifts, straining his finances. Worried that he couldn’t pay his bills, Tillman reluctantly went to The Money Center, a payday loan company with locations in San Antonio and Houston.,He took out a $500 loan. The 64-year-old Houstonian doesn’t recall the exact terms of the loan, but The Money Center’s website currently offers a $500 loan at 650 percent annual interest, or about $150 in fees and interest for a two-week loan.
Such terms are common in Texas, where payday and car title lenders are allowed to charge customers unlimited fees.,Like many low-income borrowers, Tillman found he couldn’t fully pay off the loan when it came due.
Instead, the lender offered to roll it over for another two weeks and tack on another round of fees. Tillman took on more payday loans to pay off the original loan and soon found himself in deepening debt. And then, in October 2009, he was laid off.,Tillman said he lost his job on a Wednesday and by Friday he was calling The Money Store to ask for an extended payment plan. No one called back.
With his bank account empty and hoping to avoid overdraft fees, Tillman halted the automatic withdrawals he had set up for monthly payments on his payday loans. Eventually, he reached a manager at The Money Store.,In Tillman’s case, however, the debt collectors weren’t exactly lying: He could be arrested for not paying his payday loan debt.,An Observer investigation has found at least 1,700 instances in which payday loan companies in Texas have filed criminal complaints against customers in San Antonio, Houston and Amarillo.
In at least a few cases, people have ended up in jail because they owed money to a payday loan company. Even when customers avoided jail, the Observer has found, payday loan companies have used Texas courts and prosecutors as de facto collection agencies.,This is despite state laws that forbid payday loan companies from even threatening to pursue criminal charges against their customers, except in unusual circumstances. The law specifically prohibits theft charges when a post-dated check is involved. (Most payday loans require borrowers to provide a post-dated check or debit authorization to get the money.) The state Office of Consumer Credit Commissioner has advised the payday loan industry that “criminal charges may be pursued only in very limited situations” where it can be proven that a borrower knew a check would bounce.,The Consumer Service Alliance of Texas, a trade association representing 80 percent of Texas’ payday and title loan companies, is even more strict about the practice. “Members will not threaten, or pursue, criminal action against a customer as a result of the customer’s default on a credit service agreement,” according to the group’s website.,But it’s nonetheless increasingly common for people to be arrested for unpaid debts, including in Texas. In 2011, The Wall Street Journal reported that more than a third of states allow borrowers who can’t or won’t pay debts to be jailed, even in states that prohibit debtors’ prisons.
Debt-collectors and other financial firms, the newspaper reported, are suing borrowers over unpaid credit cards, consumer loans, auto loans and other debts. Many people report never receiving a notice of the lawsuit and end up with an arrest warrant obtained through the courts. However, in Tillman’s case and others in Texas, some payday lenders have found an even more direct way to harness the power of the criminal-justice system.,Christina McHan failed to repay a $200 loan from Cash Biz near Houston.
In November 2012 she was arrested, pleaded guilty, and was assessed $305 in additional fines and court costs. She spent a night in jail to “pay off” the debt.,In Amarillo, the wife of a military veteran with 23 years of service complained to the Office of Consumer Credit Commissioner that the Potter County Attorney was pursuing theft charges against her husband even though the couple was in bankruptcy. “My husband is a good man!” she wrote to the credit commissioner. “He has never done anything wrong, he fought for this country for 23 years … and now the Potty [sic] County Attorney wants to prosecute him for a payday loan.”,In an emailed response to questions from the Observer, Assistant Potter County Attorney T. Eric Dobbs wrote that his office doesn’t receive many cases from payday lenders, but the ones they do get typically involve a borrower who has closed their bank account after taking out a loan, or someone who “could not keep up with the recurring fees so they stopped paying in hopes that a case will be presented to our office.” Dobbs didn’t respond to follow-up questions, including why a borrower would hope to face criminal prosecution.,Belinda Cinque, the hot-check clerk for Justice of the Peace Tom Lawrence in the Houston suburb of Humble, said she has little choice but to take payday lenders’ criminal complaints. “If all of the elements match, I’ve got to take it,” she said.
But she expressed discomfort with the situation, noting that the vast majority of borrowers had either lost their jobs or had their hours reduced at work. “Correct me if I’m wrong, but they sound like sharks,” Cinque told me. At some point last year, she started getting calls from people—some in tears—making payments to Cash Biz through the court. A collection agency was “threatening them that they were going to be taken to jail,” Cinque said. To her, it sounded like the debt was being collected from two directions—a debt-collection company and through the court. She told Cash Biz to stop filing hot-check complaints as long as the company was using debt collectors.,Almost all of the cases in Lawrence’s Harris County court emanate from Cash Biz, which appears to have found a way around the prohibition on prosecuting “held” or post-dated checks.
Most payday loan companies in Texas have their customers fill out a post-dated check or authorize an electronic debit from a checking account for a future date. When the loan is due, the company either cashes the check or debits the account. That is, unless the customer doesn’t have the money and wants to “roll over” the loan. Cash Biz, on the other hand, gets checks from their customers dated for the day of the transaction.
If the customer doesn’t come in and pay on the loan before the due date, the company can try to cash the check.
If it bounces, then the company claims it has the basis for a hot-check charge. (Reached by phone, Cash Biz President David Flanagan said he would have someone else in the company call me back.
No one did.),Baddour, the consumer advocate, said that Cash Biz’s “innovation” points to a persistent problem with the payday loan industry in Texas.,“What we’ve seen over and over again is that [payday lenders in Texas] are pushing the limits of the law, always finding the loopholes, finding ways to navigate through the law,” she said.,Still, it’s not clear that the Cash Biz model is kosher. Taking out a payday loan isn’t like writing a hot check for groceries.
Regardless of when you date the check, you’re borrowing money because you don’t have any.
The promise is that you will eventually pay the money back with interest. In the payday loan model, the check is security for the loan, not payment.,Defense attorney Jeff Ross, who specializes in hot-check cases in Houston, said that payday loan customers aren’t committing a crime, because the payday lender accepts the check knowing that it’s not good at the time the loan is given.,“If I want to be a hard-ass about it I’d say, ‘Listen we’re not going to pay a nickel,’” Ross said. “This doesn’t even belong in this court. It’s a hold check and therefore it’s not a criminal case.” While he doesn’t see anything patently illegal about the JP court’s practice, the intent is clear. “The payday loan people file with the JP court and use them as muscle to collect their money.”,So is the DA’s office functioning as a debt-collection service for payday lenders?,“Well, we send a letter out,” Herberg told the Observer. “That’s part of the services that are offered.” The DA, he said, can’t decide which merchants to work with or not, even if “payday lenders may not be the favorite in the community.”,Herberg said his office won’t prosecute cases in which a payday loan is involved unless there’s a clear case of fraud or deception. “If it’s for a loan, they’re not going to submit them to a criminal prosecution, it would be for collections purposes only.” However, the collections letters from the Bexar County DA threaten arrest, jail and criminal prosecution—an inconsistency that the credit commission noted in its correspondence with Marpast.,There were other details that bothered Tillman.
For one, the outstanding loans were for $500 and $350, respectively, not the $1,020 that Marpast was demanding.
He also bristled at the thought that the Bexar County DA’s office was profiting from its collections letters.,In all, the Bexar County DA has accepted more than 1,400 criminal complaints from payday lenders since 2009 totaling almost $373,000, according to records from the DA’s office obtained by the Observer.,The Office of Credit Consumer Commissioner has occasionally told payday lenders to stop seeking criminal charges against customers, but the agency has no jurisdiction over judges or prosecutors. After Tillman wrote to the consumer credit commissioner in August to complain about his situation, the agency investigated.
In a September letter to Marpast, the agency instructed the company to “advise the DA’s office to cease collection activities on all checks” forwarded by Marpast. This should keep Tillman and other borrowers out of jail.,Since the Texas Legislature assigned the agency the duty of overseeing payday and title loans in 2011, it’s been stretched thin.
The consumer credit commission has 30 field examiners to cover 15,000 businesses, including 3,500 payday and title lenders.,“It’s a difficult situation,” Aguilar said. “People get put in tough situations where they’re just not armed with enough knowledge to deal with [payday lenders], and they get intimidated.
If somebody calls you and tells you that you’ve violated the law in a criminal manner, that’s going to get your attention and shake you up.”
payday loans shreveport
Comments
Post a Comment