Illegal Rollovers of Payday Loans Lead to Revocation of Lender License
In Nebraska, it's illegal to rollover payday loans. The law allows for no extension of any kind.
Perhaps Jim Kyles, owner of Fast Money, never read this provision. The Journal Star explains why the cash advance provider has had his license revoked by the Nebraska Department of Banking and Finance.
According to the article, Fast Money is no longer able to offer new transactions, but it may conclude pending business by collecting on bad credit payday loans that started before its license expired last week, the department said.
The attorney for the payday loan company questioned the department’s authority in the matter, stating the business is entitled to do business under an annual license issued in April. Nevertheless, last week - before the department announced the expiration of what it called a provisional license - it served the company with an order to show cause why its license shouldn’t be revoked, setting a hearing for Oct. 5.
Kyles' lawyer, Terry Barber, believes his client received a notice saying a provisional license had expired, but he still finds no authority for a provisional license in state law.
“I think we’re plowing some new dirt here,” he said.
Mike Cameron, counsel to the Department of Banking and Finance, said the department has a long history of authorizing provisional licenses in the cash of no fax cash loan businesses. The latest action continues months of complex dealings between the state and Fast Money.
Under the current order, Kyles would have no participation in any delayed deposit/no fax payday loan business for five years, the department said. Kyles could not be reached for comment.