LEGAL ACTION AGAINST “DAY LENDERS OF PAY”
CORNYN PREFERS LEGAL ACTION AGAINST “DAY LENDERS OF PAY” AUSTIN - Attorney general of Texas, John Cornyn, today he gave to know that his office has achieved that temporary judicial decrees were freed to suspend the activities of certain entities dedicated to the handling of “day loans of pay” (acquaintances like “payday lenders,” in English). The entities affected by the legal action are EZ Cash and Quick Cash, both of which are provided with divisions in the Vale of the Brave Rio. “There will not be tolerated the business that violate the law, especially those that there do victims of the people who more needs help,” Attorney general Cornyn specified. The “day loans of pay” are loans for small quantities of up to some hundreds of dollars, which are offered by lenders who are not provided with the due licenses, and who receive an annual money-market rate between 650 and 860 per cent.
The above mentioned entities generally him offer loans to consumers with low income, which are facing him economic troubles, which have no savings, or which are not provided with access to traditional sources of credit. Although the quantities that they give are small generally between 100 and 500 dollars the lenders receive quotas that can become excessively high rates of annual interest. Attorney general Cornyn alleges that these so called “day lenders of pay” are committing usury, and that his activities violate the Record Against Deceitful Commercial Practices of Texas (Deceptive Trade Practices Act), the Record for the debt Collection of Texas (Texas Debt Collection Act) and the credit Title of Texas (Texas Credit Title). The law of Texas imposes limits of 10 per cent as for the money-market rate that can be received by short-term loans, which are extended by lenders without licenses, if the loan is being carried out by a lender with license. None of the business affected by the legal action begun by Cornyn is a pedantic lender. The judicial order was freed by the Judge Leticia Hinojosa.
In accordance with the decree, he is prohibited the accused to extend loans to the consumer or to carry out presentations deals for payments deferidos. Attorney general demanded to the above mentioned business on May 12, 1999. The legal actions are being carried out by request of Leslie L. Pettijohn Commissioned of Credit to the Consumer.The demands against EZ Cash and Quick Cash were preferred in the Court of State District in the Nobleman’s County, and they are being handled by the substitute public prosecutors Ric Madrigal and Tracey Whitley, members of the division of McAllen of the Division for the Protection to the Consumer.