Legal Question in Banking Law in Pennsylvania

Read this article I wrote at http://www.rachelhunterlaw.com/articles/article_9_Pay_DAY_Lending.html

Payday loans are unlawful in PA unless: (a) the lender registers to do business in PA OR (b) the lender charges no more than 6% interest.

Most of the payday lenders do not find it profitable to comply with the law. You are obligated to repay what you borrowed plus 6% interest if the lender is not registered. Contact the PA banking department to see if the lender is registered. My guess is they are not.

You probably have already repaid the principal plus 6% interest but make sure.

Close your bank account tomorrow so that further drafts by the lender cannot be taken. You have to close the account; putting a stop payment or withdrawing authorization is not enough because the lender will use the ACH process to raid your account.

If you have paid already, then you can write to the lender (if you can get a valid US address) advising them that they have not complied with PA law, that they are limited to collecting the principal plus 6% interest and that you have repaid and not to bother you or take adverse action on your credit or you will report them to the PA banking department (which is already in litigation with Western Sky/Cashcall/Delbert). If you have not paid in full, start saving up your funds and when you have saved the principal plus 6% then you can offer to pay this and be done provided you get a settlement letter (you want all of this in writing). If the lender refuses, then don't pay.

Its very unlikely that the lender will sue in PA especially if the lender is violating the law..