Rulings on Payday Loans: Overcharging
Although we could not find comprehensive examples of legal cases around payday loans in which the lender overcharged the borrower in California or New York. We have provided some key findings.
To provide examples of legal cases around payday loans in which the lender overcharged the borrowers, we started by searching through legal resources such as World Legal Information Institute, Casetext for possible case studies relating to payday loans. Unfortunately, these sources did not provide details regarding payday loans.
We then searched for cases studies on the Leagle website with the aim of finding some examples of legal cases around payday loans in which the lender overcharged the borrower. This source did not give the exactly required examples of lenders overcharging the borrowers. We were able to find two case studies on CashCall, Inc involving De La Torre and flowers vs ezpawn oklahoma inc. which gave insights on borrowers been overcharged but not comprehensive detail.
Finally, we tried searching through media sites such as Forbes, etc for any press release on some examples of legal cases around payday loans in which the lender overcharged the borrower in California or New York. Unfortunately, again this search provided an example of cases around lender overcharged the borrower but they were not payday loan legal cases. We have been able to provide some key findings which can give the client a clear understanding lender overcharging the borrowers.
FLOWERS v. EZPAWN OKLAHOMA, INC.
Flowers claims Ezpawn Oklahoma, inc chargers borrowers a higher interest rate. Defendants Ezpawn Oklahoma charged interest rates in excess of 505.38% on payday loans to the plaintiff class, loan transactions "whereby the lender agrees to cash the borrower's check with the understanding that the check will be delayed for presentment for a specified period.
"In the case of Flowers, she received a cash advance of $350 in exchange for defendants' delayed presentment of the loan for fourteen days and a $63.00 finance charge. Flowers contends the interest and terms of these payday loans to her and members of the putative class violate Oklahoma statutory and common law usury prohibitions and seeks actual and punitive damages, penalties under the OCCC, attorney fees and declaratory and injunctive relief."
The appeal claims that a class action is essential as the amount of losses suffered by each individual class member is small (loans of no more than $500), "and equal to double the number of unlawful finance charges paid on the payday loans as well as punitive damages under."
The case has not been decided yet as the court says it's uncertain. The case has therefore been Moot.
EZPAWN OKLAHOMA, INC; is the lender
FLOWERS; is the borrower
DE LA TORRE V. CASHCALL, INC.
CashCall, Inc. provided a loan of $2,600 to De La Torre in February 2006 and $2,525 to Kempley in May 2006. Both parties were unable to meet the agreements of the contracts and were unable to make their monthly payments since their expenses surpassed their monthly income (Source 3).
CashCall, Inc. charged an annual percentage rate of 98% and 99.07% respectively. Plaintiffs believed that their individual financial status was not assessed before their loans were approved and reported that they received credit extensions by "preauthorized electronic fund transfers.
"The case, De La Torre vs. CashCall, is before the U.S. 9th Circuit Court of Appeals, which asked the state high court to weigh in on California lending law — specifically whether a high interest rate alone could be unconscionable and thereby void a loan."
Borrowers and Lender
The borrowers in this case were De La Torre and Kempley
The lender was CashCall, Inc.
"On January 22, the California Department of Business Oversight (DBO) announced a $900,000 settlement with a California-based lender for allegedly steering borrowers into high-interest loans to avoid statutory interest rate caps. According to the DBO, the lender’s practice of overcharging interest and administrative fees violated the California Financing Law, which caps interest on small-dollar loans up to $2,499 at rates between 20 percent and 30 percent, but does not provide a cap for loans of $2,500 and high
Under the terms of the consent order, the lender will, among other things, provide $800,000 in refunds to qualifying borrowers, pay $105,000 in penalties and other costs, and provide accurate verbal disclosures to borrowers concerning loan amounts and interest rate caps."