You may not currently operate in California BUT this strategy by State regulators will eventually bite you in the ass as well! No payday loan ACH transactions allowed. Image Cash Letters (ICL) to replace ACH?
No ACH transactions to be allowed in Calif.
A data base to be enforced in California.
Proposed Regulations under the California Deferred Deposit Transaction Law
The DBO (California Department of Oversite) recently issued an invitation for comments on a revised draft of changes to its payday lending regulations. The DBO supervises payday lending under the California Deferred Deposit Transaction Law (CDDTL). The deadline for submitting comments is June 24.
Two components of the draft rules have generated significant debate.
- One would limit transactions to paper checks only – no ACH, debit cards, prepaid cards or credit cards.
- The second provision would establish a common database under DBO’s management. Payday lenders would have to record all loans in the database, and check the database prior to the transaction to determine whether the borrower already had an outstanding payday loan.
The Invitation for Comments notice and proposed text are available at this link: http://www.dbo.ca.gov/Licensees/Payday_Lenders/Regulations.asp.
Please submit comments to email@example.com.
What’s this mean? (Visit EChecksystem.com for an ACH alternative now.)
- If ACH for payday loans is not available in California, it can happen in your state.
- Payday and other small dollar credit lenders who fail to add Image Cash Letters to their money delivery options will not survive.
- Valuations for payday loan, small dollar credit and car title lenders will increase.
- Your Number One priority is to insist your associates, customers, staff, peers, and the industry respond to the Calif. Department of Oversight immediately!
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