The Washington State Department of Financial Institutions is urging consumers to verify the licensing status of any payday lender they're considering doing business with.
State law requires all payday lenders — including Internet payday lenders — offering services to Washington residents, including online payday lenders, to be licensed by DFI before doing business in our state.
Some online payday lenders offer services that are not legal in Washington State.
In addition to verifying a payday lender's license, consumers considering a payday loan should also be sure they are aware of and understand the current and pending laws concerning payday loans. Starting Jan. 1, 2010 new payday lending laws and regulations go into effect.
Under the new laws:
-- You may only borrow a total of $700, or 30 percent of your gross monthly income — whichever is less.
-- Your information will be registered in a statewide database, ensuring that all payday lenders in Washington have your most up-to-date loan information.
-- You may only take eight payday loans per 12-month period.
-- If you unable to repay your loan on or before the day it is due, you need to notify your payday lender. -- --- Your lender is then required to offer to allow you to pay back your loan over a period of 90-180 days depending on the size of the loan. The installment plan will not incur additional fees.
-- If you have an installment plan you may not have another loan.
-- Lenders may not harass or intimidate you when collecting a loan. If you are harassed, contact the Washington State Department of Financial Institutions and file a complaint.
If you are having trouble maintaining a budget, contact your local Asset Building Coalition for information on workshops that will give you the tools necessary to develop and stick to a realistic budget for you and your family. Find your local Asset Building Coalition at www.washingtonabc.org/node/29. You may also wish to speak with a non-profit counselor. Find one year you by contacting National Foundation for Credit Counseling at http://www.nfcc.org/FirstStep/state_locate.cfm and enter "WASHINGTON" or call 1-800-388-2227.
Know what you can afford to pay back, make sure you understand what you're agreeing to and what your options are before signing any loan agreement. Verify a lender's license and learn more at http://www.dfi.wa.gov/consumers/education/payday_loans.htm