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Response from PA Dept. of Banking

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I filed an online complaint to the address someone posted on my original thread yesterday. Here is the response I received:

For the most part payday loans are not regulated in Pennsylvania at present. Entities that offer payday loans in Pennsylvania via the internet or by a local office, enter into partnership agreements to make and service loans on behalf of out-of-state banks/lenders and, thus, circumvent Pennsylvania’s lending laws. Over the past several years, some federal regulators had largely informally banned payday lending by their banks and the Federal Deposit Insurance Corporation (“FDIC”) made it clear that it believes that “providing high-cost, short-term credit on a recurring basis to customers with long-term credit needs is not responsible lending and increases banks’ credit, legal, reputational and compliance risks.” So most of the out-of-state banks/lenders who had agreements to make loans in Pennsylvania withdrew from the marketplace.

Please note that the Pennsylvania legislature passed legislation requiring companies that engage in non-mortgage consumer lending to be licensed by the Department effective February 1, 2009. To read more about this, click on the link below.

An alternative to payday lending is a program called “Better Choice” offered through Pennsylvania credit unions. The Pennsylvania Department of Treasury supports the program and offers information on specific credit unions that participate. Please contact the Pennsylvania Department of Treasury at or by telephone at 717-787-2465. Obtaining loans online with internet lenders is a risk and the Department would not recommend conducting business with an online lender that may not be licensed. To confirm a lender’s license please contact the Department at 1-800-722-2657.


Not sure if they are telling me I do need to pay more on the $850 loan I have w paydayone on top of the $2k I've already paid or not? As for the credit union idea, if I end up needing to close my bank acct I may look into opening an account with one of them anyway. Not sure if bad credit would be an issue there?

Hopefully, this info will help any others who may be struggling in PA with a PDL nightmare!! I'm not really too sure what to make of it!

That took some chutzpah on the Banking Department's part to send you that. The legislature didn't pass any new laws. The Department changed its interpretation of a VERY old law.

Sub: #1 posted on Thu, 08/28/2008 - 02:17

FreakyFriday FreakyFriday

(Posts: 490 | Credits: 0.82)

I'm still not sure what it is they are suggesting I do, so I left a voicemail at the 800# she gave me to see if paydayone is licensed (which I think they are).

Sub: #2 posted on Thu, 08/28/2008 - 02:28

kelly20303 kelly20303

(Posts: 19 | Credits: 5.35)

Payday One has licenses all over the country. They made their PA loans out of the Delaware license, I believe. If I understand the Department's policy correctly, they're covered by the safe harbor until February.

Sub: #3 posted on Thu, 08/28/2008 - 03:07

FreakyFriday FreakyFriday

(Posts: 490 | Credits: 0.82)

Oh, well that is just lovely :evil:

Thanks for the info!

Sub: #4 posted on Thu, 08/28/2008 - 05:12


Finally, PA is doing something.... come Feb, several more payday lenders will withdraw from PA...

Sub: #5 posted on Thu, 08/28/2008 - 07:34


Exactly! Even though the Feb 2009 date will not help me, I am sure it will help many other PA residents from falling into this PDL trap.
I also left her a voicemail thanking her, and received one back where she reiterated the 2/1/09 date. NICE!

Sub: #6 posted on Thu, 08/28/2008 - 21:43

kelly20303 kelly20303

(Posts: 19 | Credits: 5.35)

If you look at thsi thread: pa-pdl.html

There is more information about the change.

Sub: #7 posted on Thu, 08/28/2008 - 21:52

goudah2424 goudah2424

(Posts: 7936 | Credits: 1224.92)

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