Bookkeeping

CT consumers will get a refund from the payday loan collection agency

CONNECTICUT — The state’s banking department has reached a settlement with a consumer collection agency trying to collect payday loans that can’t be enforced in Connecticut.

Connecticut-licensed consumer collection agencies cannot collect on small loans (less than $15,000) from unlicensed non-exempt lenders, including those affiliated with tribes. Small loans made to Connecticut consumers by licensed or exempt lenders that charge more than 12% interest are illegal.

Connecticut DOB has reached a consent order agreement with TruAccord Corp that will reimburse a total of $44,000 to 103 Connecticut consumers.

Tribal Sovereign Immunity protects tribes and federally recognized entities that are “arms of the tribe” from certain enforcement actions under state law, but it does not apply to law enforcement agencies. consumer recovery.

“While the Department has done a great job downplaying what is widely known as ‘payday lending’ here in Connecticut, we still see unlicensed out-of-state businesses engaging in this practice and consumer collection agencies attempt to collect this debt,” Banking Commissioner Jorge Perez said in a statement. “I want to be clear that any company originating loans in this state that violates Connecticut law with excessive interest rates and collection agencies trying to collect that debt will be investigated by the Department.”