Pennsylvania is one of 13 States that ban any kind of payday loans - whether physical loan centers or online sites.
The ban came about as various groups have persistently opposed this kind of lending within the State because of exploitative charges and terms of payment, claiming it will only put residents to long-term cycle of debt like in other States.
However, on June 2012, the House of Representatives of Pennsylvania approved the HB 2191 which lifts the current restrictions that took effect in 2010. HB 2191 will allow short-term loans in Pennsylvania with at least a 300% annual interest rate. HB 2191 has been forwarded to the Senate and the appropriate Committee is reviewing the Bill.
According to the main sponsor of the bill, Rep. Chris Cross, HB 2191 will put the following restrictions on payday lending:
Limit loan size Restrict interests and fees being charged to customers Payment extension with no additional charge Protection for marines and members of military residing in Pennsylvania
However, groups which are petitioning against HB 2191 say that the Bill will not really provide better loan terms but will increase the interest rates which is not good for consumers especially military personnels, marines and their families.
The current payday loan restriction law in Pennsylvania only allows 6% annual interests on all loans and only lenders licensed by the Banking Department can charge up to 24% interest. If HB 2191 will also be approved by Senate, not only will payday centers can be allowed to operate in Pennsylvania again, even online payday loan centers such as Plain Green Loans and CashNetUSA can now grant payday loans to Pennsylvania residents.
However, the qualified payday centers will have to provide loans to Pennsylvania residents according to the final provisions of the Bill if passed into law.
For example, Plain Green Loans offer $1,000 loan for new applicants with a 299.17% with bi-weekly payments until the loan is settled. If the Senate will approve the HB 2191 House version of at least 300% allowable interest, Plain Green Loans will be allowed by law to grant payday loans to Pennsylvania residents. Until the HB 2191 has not yet been approved by Senate, the total payday loan ban is still effective and therefore, any kind payday lending is not yet allowed.
The other States that still enforce the ban on payday loans are:
Arkansas Arizona Connecticut Georgia Maryland Massachusetts New Jersey New York North Carolina Vermont West Virginia Kentucky
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