New Mexico AG King – Payday Loan Lender Fastbucks Loses

AG Wins Lawsuit Against Fastbucks Payday Loan Lender…$10,000,000 Restitution Expected

Wednesday, September 26, 2012

(SANTA FE)—Attorney General Gary King prevailed today in the three year legal battle against small loan lender FastBucks, LLC.  The company, with offices around New Mexico, was ordered to pay restitution to consumers; to stop making illegal loans; and will be unable to enforce certain current loans that are not in compliance with state law.

“New Mexico law prohibits the kinds of business practices and exorbitant interest rates by which FastBucks has been victimizing consumers for years,” says Attorney General King. “The judge agreed with our contention that FastBucks’ installment loans and associated lending practices were unconscionable as a matter of New Mexico law.

The Attorney General congratulated attorneys and staff from his Consumer Protection Division who have been litigating the case against FastBucks since 2009.

In his order today, Santa Fe District Judge Michael Vigil stated, “Defendants took advantage of borrowers’ lack of knowledge, ability, experience or capacity to a grossly unfair degree…Defendants’ loan practices have resulted in some borrowers paying back more than twice the amount they borrowed.”

The AG’s lawsuit suit alleged that FastBucks’ installment loans—twelve-month loans carrying APRs of 520 to 650 percent—were unconscionable under the New Mexico Unfair Practices Act (UPA).  The suit also alleged that FastBucks’ lending practices took advantage of their borrowers by encouraging them to remain indentured to the company in a never-ending cycle of debt.

The court permanently enjoined FastBucks from originating their installment loans, and also awarded New Mexico consumers restitution measured by the amount of money FastBucks’ borrowers paid on their installment loans over and above what they would have paid had they been given a state-regulated payday loan.  While the exact amount of restitution has not yet been determined AG King believes the figure will be well in excess of $10,000,000.

In his opinion, Judge Vigil found that FastBucks crafted their installment loan products to circumvent the New Mexico Legislature’s efforts to rein in payday loan abuses in 2007.  He flatly rejected FastBucks’s claim that, in the wake of these legislative reforms, it promoted its unregulated installment loan product over its regulated payday loan product for borrower convenience.  

The court went further to recognize that FastBucks’ business model depends upon encouraging “recurring inescapable indebtedness to Defendants.”  He specifically cited the example of Rose Figueroa, FastBucks’ store manager in Española, who could be heard on a FastBucks company conference call explaining: “[w]e just basically don’t let anybody pay off…[w]e tell them how their tax refund is better used at Wal-Mart” than paying off their loan with FastBucks.

Judge Vigil also declared that the plain terms of FastBucks’ installment loans create “exorbitantly expensive repayment obligations,” and thus result in gross disparities between the values received by borrowers and the prices paid, in violation of the UPA.  The court thus concluded: “Except to the extent they accord with the statutorily required terms of payday loans, Defendants’ installment loan products and loan agreements by any other name that share the same or similar terms as their installment loan products” are “unenforceable as a matter of New Mexico law.”


Tribe Payday Loans- The Native American Financial Services Association (NAFSA) Fed’s Continued Commitment

We discuss the entrance of Native American Tribe lending  in regards to payday loan, car title and other microlending niches often. Thanks to Allen Parker at for bringing this important news to our attention:

WASHINGTON (September 25, 2012) – The Native American Financial Services Association (NAFSA) today applauded the Senate Committee on Indian Affairs’ continuing commitment to the enduring strength of federal-tribal relations.

During the hearing on Thursday, September 20, 2012, the Senate Committee on Indian Affairs made it clear that the tribes have the undisputed right of self-governance and self-determination. Indeed, testimony throughout this hearing repeatedly reinforced the principle that self-governance and self-determination are fundamental components of Native American culture and vital elements of every Native American community across the country.

Read the entire piece here: Allen Parker

Through the protection of consumer rights and sovereign immunity, NAFSA provides vital services to tribally operated lenders serving the under-banked with better short term financial services, furthering economic development opportunities in Indian Country.


Alabama-Regions to Lower Cost of Payday Loans

Alabama-Regions to Lower Cost of Payday Loans

“Ah… the capitalistic system is working nicely. We see consumer rates coming down for payday type small dollar loans. We witness the entry of sovereign tribes as direct lenders adding increased competition to the B&C’s. We hear about offshore lenders lacking access to the U.S. consumer financial data. APR’s on these payday loan products are falling as demand is increasing (Refer to DFG Global Latest financial reporting).

Pennsylvania may very soon reestablish the payday loan product. Other states will certainly follow. They don’t want their constituents financial data residing in Panama or Costa Rica.

Regulators are coming full circle and returning to embrace the payday loan product when full disclosure of all rates and fees are implemented.

And finally, it’s “all about the money, stupid.” Last year 14,000,000 U.s.residences got a payday loan. Generally speaking these consumers wanted to borrow a few hundred bucks fast with little hassles. As jobs pickup, more consumers will qualify for and receive these microloans.

Where will they spend this money? On things that create jobs, taxes, services, housing, education… Read American Banker Article Here

Jer – Trihouse Consulting


Payday Loans Legal Again in Pennsylvania?

Since Internet payday loan lenders have been offering their product to residents of PA for years, Harrisburg is thinking of bringing payday lending back — with new protections. “It is already easy to take out a payday loan in Pennsylvania because all you have to do is pick up the telephone or go on the computer,” said Pa. Rep. Chris Ross, R-Chester Co., the bill’s sponsor. Ross’ Bill would allow payday loan lenders to charge whatever they want in interest, but finance charges would be capped at 12.5%. Also, if you can’t pay the loan back, payday loan lenders would have to offer a long-term re-payment plan. The bill also bans people from taking out one loan to pay off another, often called “rollover loans.”

Here’s a link to the Pennsylvania Payday Loan Bill: PA Payday Loans


Tribe Payday Loan Business – CNBC Report Wrongheaded

'day in the life: lunch money' photo (c) 2004, marya - license:“A little known loophole is letting some payday loan companies dodge state laws and charge interest rates much higher than the states would otherwise allow, a CNBC investigation has found.”

Your CNBC team must have been under a rock the past 10+ years. Payday loans have been offered via the tribe “sovereign nation model” for at least that long.

Much like the gaming industry, the payday loan tribe model has evolved into a highly sophisticated, profitable business enterprise. The “rent-a-tribe” characterization is a thing of the past.

Regarding usury rates, if the so-called consumer activists bothered to familiarize themselves with a payday loan product that 14,000,000 Americans elected to “use” last year, they would immediately recognize that payday loan companies do a much better job regarding fully disclosing all rates and fees than banks and credit unions do. Wells Fargo charges $10 per $100 loaned and debits their PDL customer the moment their customer’s paycheck is electronically deposited in their WF checking account; zero disclosure of a 400% APR and ZERO risk!

Here’s a link to the full CNBC article, “How Some Payday Lenders Charge”