Payday Loans

West Virginia Payday Loan Laws

As per West Virginia payday loan laws, payday lending is illegal in this state. This form of lending has never been legal in this state. The relevant citation is W. Va. Code 46A-4-107 and 32A-3-1 et seq. Payday lenders have closed their businesses in this state. However, since the sister state Virginia still treats this type of lending as legal, consumers usually hop across the border to borrow short-term cash advances. But, such moves are not very wise because of the extremely high rate of interest charged on these loans. Virginia charges over 650% per annum just in the form of interest; besides that, there can be several other additional finance charges as well. Therefore, you are strongly recommended to consider better, cheaper alternatives, such as borrowing small loan from credit unions, requesting an advance payment from your employer, or obtaining a personal loan.

Lawsuits Against Internet Payday Lenders

Though West Virginia payday loan laws apply to Internet-based payday loan companies also, officials generally find it very difficult to take actions against them. Enforcement of the anti-payday lending laws has not been very smooth in this state, especially against those lenders who operate their businesses from Internet. Still, there have been instances when officials have filed criminal lawsuits against certain online payday lenders and have achieved success to some extent. For example, in March 2009, West Virginia Attorney General filed two lawsuits against a dozen online payday loan companies. Their efforts brought great results, as all those companies are now banned in this state; they can no more issue payday loans to those consumers who are residing in the state of Washington. The court judgment termed online payday loan companies as “loan sharks of today”.

Small Loan Act Applies

As per West Virginia payday loan laws, all licensed lenders in this state must follow the Small Loan Act, which restricts the maximum APR (annual percentage rate) to 31% per annum on a loan up to $2000.

The State Is Officially Free Of Payday Lenders Since 2007

It was in the year 2007 when the last payday loan company had packed its business and left the state. The company’s name was FACA (First American Cash Advance) then had to write off $616,000 of payday debt that was allegedly owed by over 2700 borrowers who were residents of this state. Besides that, the company then had also paid $22000 as compensation to the state authority to be distributed to over four hundred borrowers who had been unfairly charged extremely high rate of interest. Furthermore, FACA also paid $200,500 to the state for consumer protection purposes.

Many lenders are still running their business in this state illegally. If you come across one or if a lender is treating you unfairly and not following the West Virginia payday loan laws, you can file a complaint against them with the Office of West Virginia Attorney General, which can be contacted at fax number (304) 558-0184 and at phone number (800) 368-8808. Their office is located at Consumer Protection Division 812 Quarrier St., 4th Floor, Charleston WV 25301.


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One Response to “West Virginia Payday Loan Laws”

  1. scott says:

    Very wisely described. Pay day lending system is not allowed in the state of West Virginia. It is totally illegal to offer pay day loans in this state but in Virginia you can easily take pay day loans on a very high interest rate. It should not be done because there may be some other alternatives like you can get some advance payment from your employer or can go for a personal loan. If you are taking a pay day loan you should think twice but if you are going to take a pay day loan and that too from an interest based company you have to think for some more time. Internet based companies are very difficult to locate and in case of any fraud it becomes extremely difficult to take any action against such companies. The state authorities have banned pay day lending completely since 2007 but is some licensed lenders offer loans then they have to keep their interest rate up to some specified limit. Make sure that you should not become a part of any illegal pay day lending company. Every one should follow the above mentioned points for the information retrieval.

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