United Cash Loans - Ordered to Cease & Desist in Maine!

Regulators Halt Oklahoma Payday Lender


August 6, 2007



Contact: Will Lund, Director
Phone: (207) 624-8527



Augusta - AUGUSTA, MAINE ???????? Maine credit regulators issued a cease and desist order on August 3, 2007 prohibiting an unlicensed Oklahoma payday lender from doing any further Internet business with Maine consumers.

The Maine Office of Consumer Credit Regulation (OCCR) ordered United Cash Loans of Miami, Oklahoma to stop engaging in any lending activity with Maine consumers, and to refund any fees paid to date by those consumers.

In May 2007, a Houlton consumer reported to OCCR that she entered into an Internet payday loan with United Cash Loans. She paid $475 for a loan of $300 for five weeks, which results in an effective APR of more than 600%. These rates far exceed limits established in Maine law. She contacted state regulators and closed her checking account when the lender began threatening to deduct an additional $250 in fees.

Oklahoma credit regulators have also issued a cease and desist order against the company. The lender reportedly claims that it is operated by the Modoc Indian tribe, and is therefore sovereign and exempt from the consumer protection laws of any state.

???????While an Indian tribe may be free to govern activities on its own tribal land, Maine law deems the activities of United Cash Loans to have occurred in this state,??????? said Will Lund, director of the Office of Consumer Credit Regulation. ???????This company entered into a contract with a resident living within our state????????s borders, and arranged to deduct funds from her bank account here in Maine.???????

???????The Maine Legislature has made clear that our state????????s lending laws apply whenever a payday lender outside the state enters into a transaction with a consumer located in this state,??????? Lund added.

A payday loan is a small (typically less than $500), short-term loan made to a consumer who has a checking account. With an Internet payday loan, the lender makes an electronic deposit into the consumer????????s account, then automatically withdraws the loan amount--plus large fees????????on a weekly basis or in a lump sum.

Payday loan companies making loans to Mainers are required to obtain a ???????supervised lender??????? license. United Cash Loans does not hold such a license, and ignored certified letters sent in May and June by state regulators requiring that it cease lending unless it obtained a license.

Should United Cash Loan fail to comply with the cease and desist order, state regulators may schedule an enforcement hearing, at which attorney????????s fees, cost of investigation and other costs will be requested. Maine consumers who have questions about United Cash Loans can call OCCR????????s consumers-only hotline at 1-800-332-8529 (1-800-DEBT-LAW).

A copy of the order is attached.