Lawyersandsettlements.com; August 11, 2013
Albany, NY: Payday lending is already illegal in New York State, as it is in more than a dozen other states in the US. But that hasn’t stopped a myriad of Internet payday lenders from attempting to circumvent state laws by plying their trade online. What online payday lenders may not realize, or perhaps don’t care to know, is that Internet payday loans are just as illegal as making a payday loan in person, in the State of New York.
And Governor Andrew M. Cuomo has had enough. On August 6 of this year, Cuomo’s office issued cease and desist communiques to no fewer than 35 online payday loan companies currently plying their trade illegally in the state.
One of those lenders is Plain Green, LLC - the proprietor of Plain Green Loans.
Online payday lenders have come under fire for issuing short-term loans to individuals in need of a quick infusion of cash to get them through to their next paycheck. These are individuals who may not have the best credit rating, and may not be in a position to secure a loan by traditional means. And not lost on critics is the inherent convenience of doing everything online from the comfort of one’s own home, without the need to actually go into a bank with hat in hand.
But in exchange for that convenience, or the willingness to extend loans to individuals with poor credit histories, interest rates tend to be extremely high. Some say, exorbitant.
Plain Green Loans, for example - one of the companies named in Governor Cuomo’s cease and desist order - charges annualized interest rates for short-term loans as high as 379 percent. According to American Banker (7/23/13), that’s the APR (annual percentage rate) for a Plain Green Loans client who borrows $250 for a period of 16 weeks. At the end of the term, $440 will be due. For a larger loan of $2,000 borrowed over a period of 76 weeks, the APR is about 160 percent. In terms of actual dollars, $5,206 will be paid back.
In other words, that $2,000 loan will cost the borrower $3,206 in interest and financing charges.
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