Montgomery County: Maryland watches interest rates on out-of-state loans
Issue date: 1/29/07 Section: Neighborhood
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Maryland's Department of Labor Licensing and Regulation is warning residents about illegal internet consumer or installment loans. Out-of-state companies loaning money to Maryland residents must be licensed to do business in Maryland and therefore fall under the jurisdiction of state laws and interest rates which protect consumers.
A joint investigation by the Financial Regulation Enforcement Unit of DLLR and the Montgomery County Office of Consumer Protection found an unlicensed California company loaning money to a Montgomery County resident at interest rates over 73 percent far exceeding the Maryland cap of 24 percent. The $3500.00 loan used the woman's car as collateral and required sixty monthly payments of $224.39 or a total of $13,463.40 over the life of the loan. A cease and desist order was served.
"Marylanders who receive loans from lenders who don't comply with state law give up the many protections our laws supply," said DLLR Secretary James D. Fielder, Jr., PhD. "DLLR and the Montgomery County Office of Consumer Affairs have a long history of aggressively pursuing illegal businesses trying to take advantage of Maryland consumers."
"Predatory lenders use the internet to circumvent state and county regulations," said Eric Friedman, Acting Director of the Montgomery County Office of Consumer Protection. "In this case the company did not comply with Maryland lending or repossession laws and we are grateful for the action taken by DLLR."
To see if a lender is licensed in Maryland, go to: www.dllr.state.md.us, "Financial Regulation," and click on "Consumer Credit Information." Or call DLLR's division of Financial Regulation at: 410-230-6100. Montgomery County Residents can also contact the Office of Consumer Protection at www.montgomerycountymd.gov/consumer or call: 240-777-3636.
A joint investigation by the Financial Regulation Enforcement Unit of DLLR and the Montgomery County Office of Consumer Protection found an unlicensed California company loaning money to a Montgomery County resident at interest rates over 73 percent far exceeding the Maryland cap of 24 percent. The $3500.00 loan used the woman's car as collateral and required sixty monthly payments of $224.39 or a total of $13,463.40 over the life of the loan. A cease and desist order was served.
"Marylanders who receive loans from lenders who don't comply with state law give up the many protections our laws supply," said DLLR Secretary James D. Fielder, Jr., PhD. "DLLR and the Montgomery County Office of Consumer Affairs have a long history of aggressively pursuing illegal businesses trying to take advantage of Maryland consumers."
"Predatory lenders use the internet to circumvent state and county regulations," said Eric Friedman, Acting Director of the Montgomery County Office of Consumer Protection. "In this case the company did not comply with Maryland lending or repossession laws and we are grateful for the action taken by DLLR."
To see if a lender is licensed in Maryland, go to: www.dllr.state.md.us, "Financial Regulation," and click on "Consumer Credit Information." Or call DLLR's division of Financial Regulation at: 410-230-6100. Montgomery County Residents can also contact the Office of Consumer Protection at www.montgomerycountymd.gov/consumer or call: 240-777-3636.
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