Let me make it clear about pay day loan watchdog does not have teeth
BATON ROUGE вЂ“ LouisianaвЂ™s workplace of banking institutions is meant to manage payday loan providers across their state but an review found that the agency does not protect borrowers from getting struck with exorbitant costs or even to stop the industry from participating in poor financing methods.
Legislative Auditor Daryl PurperaвЂ™s report points out that from Jan. 1, 2010, to June 30, 2013, the regulating agency issued more than 8,300 citations to loan providers but would not impose any charges for violations of state regulations. Alternatively, it issues sales that lenders donвЂ™t have to obey because OFI does follow up on nвЂ™t its requests to see if customers had been released refunds when violations happened.
Maybe maybe Not forcing loan providers to follow proper techniques you could end up just exactly what the report calls a вЂњcycle of debt.вЂќ
вЂњOverall, we discovered that OFI has to strengthen its examination, follow-up, enforcement, and grievance procedures to make sure it is effortlessly managing payday lenders,вЂќ the performance review states. вЂњOFI cannot guarantee that payday loan providers are sticking with state laws and therefore borrowers are protected from incorrect payday lending methods.вЂќ
The agency did not follow-up on 6,612 (62 percent) associated with major violations, therefore thereвЂ™s absolutely no way of knowing if many borrowers who have been overcharged gotten a reimbursement.
State legislation gives OFI authority to impose fines as much as $1,000 per breach and suspend the licenses of loan providers. However the regulator has not yet developed a вЂњpenalty structure or processвЂќ for enforcing charges.
вЂњOFI is failing woefully to hold loan providers in charge of sticking with state law. In addition, payday loan providers is almost certainly not deterred from over over and over repeatedly breaking what the law states,вЂќ the report states.