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NewswireToday - /newswire/ -
Fairfax, VA, United States, 01/03/2008 - CapAmerica condemns Check 'n Go, the nation's second largest payday lender, for their continued disregard for the rule of law and their pattern of unethical and criminal activity.
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CapAmerica asks DC Attorney General's office for an advisory opinion on Check 'n Go's illegal behavior, and calls upon the AG's office to investigate potential criminal law violations by Check 'n Go and other payday lenders.
On Saturday, December 29, 2007, Check 'n Go, the nation's second largest payday lender (and Washington DC's largest), announced to their Washington DC staff that the company intends to continue operating in Washington DC, providing cash advance services (or payday loans) to customers at triple digit interest rates. On September 18, 2007, the DC City council passed B17-132, or the Payday Loan Consumer Protection Act. The bill capped payday loan interest rates at 24% APR. The bill was signed by Mayor Adrian Fenty and becomes law in the District next week. Other payday lenders in Washington DC have announced that they no longer plan to charge triple digit interest rates, but Check 'n Go has decided to continue charging these usurious interest rates to our city's most vulnerable victims.
CapAmerica was approached by concerned employees of Check 'n Go in Washington DC, who feared that their company might be asking them to break DC law. Check 'n Go has attempted to flout the new DC law by announcing that they intend to remain licensed as "Check Cashers". Check 'n Go corporate officials, reportedly present at this 12/29/07 meeting, advised DC employees to not describe the new product as a "loan" for legal reasons, but to tell customers that the product is "essentially the same as before". Under DC Code regulating "Check Cashers", holders of these licenses may charge up to 10% of the face value of a personal check in order to cash said check. Check 'n Go plans to offer payday loans by providing this personal check cashing service, only to hold the checks to the customer's next payday. According to the internal sources, Check 'n Go stores will encourage customers to return on their payday to conduct a new personal check cashing transaction, in order to charge additional fees and continue to trap the individual in a cycle of debt. Interest rates under this new program would top 260% APR. The maximum allowed under DC law is 24%.
CapAmerica has asked the DC Attorney Generals Office to investigate this Check 'n Go strategy and issue an opinion on it's legal viability. CapAmerica has also asked the DC Attorney General to consider filing criminal charges against Check 'n Go and it's executive team members, considering their flagrant attempts to break DC law and their unethical and potentially illegal collection and lending practices that have been exposed by former Check 'n Go employees.
CapAmerica is an organization dedicated to eliminating preadatory payday lending across the country. We will work to support victims of organizations that ensnare people in a cycle of perpetual debt, and support alternative programs that meet small loan needs. We will work to encourage predatory lenders to change their usurious practices, and provide support to employees of such organizations that wish to come forward and report illegal or unethical activities.
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outreach[.]capamerica.org 
