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NewswireTODAY - /newswire/ -
Richmond, VA, United States, 2008/01/09 - CapAmerica makes case that Virginia payday lenders are operating in violation of state law, and asks Virginia Attorney General Bob McDonnell to launch a criminal investigation into the payday lending industry.
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CapAmerica asks Gloucester County Commonwealth’s Attorney Robert Hicks to empanel a Grand Jury to probe criminal law violations by regional executives of Check ‘n Go, the nation’s second largest payday lender, in the area of illegal collection practices and identity theft.
CapAmerica has requested that Virginia authorities immediately begin an investigation into potential illegal activity on behalf of the payday lending industry in the Commonwealth. John LaCombe, Executive Director of CapAmerica, has sent a letter to Virginia Attorney General Bob McDonnell asking that his office immediately begin investigating whether payday loan companies currently operating in the state are doing so in violation of state law. Specifically, Virginia Law § 6.1-459, states that “A licensee shall not refinance, renew or extend any loan.” This code section directly prohibits so called “rollovers”. Payday loan stores across Virginia violate this law every day by extending or refinancing loans. Even when these stores accept full payment from a customer, it is with the intent to immediately refinance the loan and return the principal to the consumer. This act is in absolute violation of § 6.1-459. Virginia Law § 6.1-445 sets forth criminal penalties for violations of the payday loan act. This code makes the violation referenced above a class 6 Felony in the commonwealth of Virginia, punishable by imprisonment for up to 5 years, or up to 12 months in jail and a $2500 fine for each occurrence.
CapAmerica has also sent a letter to Mr. Robert Hicks, the Commonwealth’s Attorney for Gloucester County, Virginia. CapAmerica has asked Mr. Hicks to empanel a Grand Jury to investigate potential violations of Virginia criminal code on the part of Check ‘n Go. The Virginia regional office and training center for Check ‘n Go, the nation’s second largest payday lender, is located within the county in Hayes, Virginia. According to reports from former Check ‘n Go employee William Harrod, associates in this location are trained, by Regional Operations Manager Susan Jessen, to utilize customer personal information in order to track their balances and purchases. According to Harrod, they are trained to utilize this information to time check re-deposits that are designed to punish borrowers who cannot pay by forcing them to incur additional bank fees. Harrod points out that the bank verification numbers given to him and other trainees by Jessen were customer account information telephone lines, not merchant verification lines. Virginia law § 18.2-186.3 makes it a crime to “Obtain, record or access identifying information which is not available to the general public that would assist in accessing financial resources, obtaining identification documents, or obtaining benefits of such other person”. Every day in Virginia Check ‘n Go associates utilize personal information from applications to, without authorization from the customer, track their personal finances. According to Harrod, they use this information to cause fees to be assessed against the consumer, causing a loss to the victim. The crime is defined as a class 1 misdemeanor if 1 person is affected, a class 6 felony if 2 – 49 people are affected, or a class 5 felony if over 50 people are affected.
CapAmerica calls upon the Virginia General Assembly to cap payday loan interest rates at 36%. Payday lenders are lobbying Richmond with promises of self reform, yet seemingly have no interest in following current law. “Payday lenders are basically running a criminal enterprise in Virginia. They are hiding behind bad laws and at the same time, they are breaking even those sham laws. Payday lenders reforming themselves is akin to the mafia cleaning their own house” states John LaCombe, Executive Director of CapAmerica. “Payday lending is a scourge, a plague on the poor and minority communities of Virginia. Virginia legislators have a moral responsibility and a civic duty to act this session in order to relieve the suffering of payday lending victims”
CapAmerica is an organization dedicated to eliminating predatory 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 
