Important ruling in Kansas
December 16, 2008 | Kansas, industry, media coverage, regulation | Comments (2)A Kansas appeals courts upholds a decision that Internet lenders must get state licenses. From the story:
A Kansas law requiring Internet payday lenders to obtain a license to do business in the state does not unduly burden interstate commerce, a federal appeals court has ruled.Rejecting a constitutional challenge brought by Logan, Utah-based Quik Payday Inc., the 10th U.S. Circuit Court of Appeals on Friday held “that the burden of acquiring a license does not outweigh the benefit from that requirement.”
Comments»
This is a bad decision. Some states don’t allow any payday lending and the only way people can get a payday loan is to drive to another state or get one over the Internet.
If an online payday loan company is licensed in Delaware, for example, and clearly states on its website that they issue loans under Delaware law, then consumers should have a right to do business with them rather than have to drive to another state.
Credit card companies issue credit under the laws of the state where they are licensed. The same should apply to payday loan companies.
I hope QuikPayday takes this to the U.S. Supreme Court.
For your concept to work, then there would have to be a federal level agency to monitor the action of the federally chartered PDL’s. It would also allow companies to “skirt” the laws of the state to which they are loaning and put the storefronts at a disadvantage due to have to follow the regs of the state.
I would like to see continuity with the regulations for each state, both storefront and online. Make everyone follow the same rules and give the consumer the ability to know that if they are being charged more than what is “common” for thier state, the lender is not legal.