Maine credit regulators issued a cease and desist order on August 3, prohibiting an unlicensed Oklahoma payday advance lender from doing any further Internet business with Maine consumers.
The Maine Office of Consumer Credit Regulation (OCCR) ordered United Cash Loans of Miami, Oklahoma to stop engaging in any lending activity with Maine consumers, and to refund any fees paid to date by those consumers.
In May, a Houlton consumer reported to OCCR that she acquired an online payday loan with United Cash Loans United Cash Loans. She paid $475 for a loan of $300 for five weeks, which results in an effective APR of more than 600%. These rates far exceed limits established in Maine law.
She contacted state regulators and closed her checking account when the lender began threatening to deduct an additional $250 in fees.
Oklahoma credit regulators have also issued a cease and desist order against the company. The faxless cash advance lender reportedly claims that it is operated by the Modoc Indian tribe, and is therefore sovereign and exempt from the consumer protection laws of any state.
“While an Indian tribe may be free to govern activities on its own tribal land, Maine law deems the activities of United Cash Loans to have occurred in this state,” said Will Lund, director of the Office of Consumer Credit Regulation. “This company entered into a contract with a resident living within our state’s borders, and arranged to deduct funds from her bank account here in Maine.”
“The Maine Legislature has made clear that our state’s lending laws apply whenever a [fast payday loan] lender outside the state enters into a transaction with a consumer located in this state,” Lund added.