Maryland is one of very few states that have very strict laws when it comes to payday lending. Payday loans in MD are illegal, so you will not see any brick and mortar buildings that say Payday loan or cash advances. The financial regulators in Maryland went after the banks that make the cash advances possible. Without the backing of the banks, the cash advance predators were unable to operate in Maryland.
The state regulators shut down the payday loan companies in Maryland. These businesses had to literally close their doors and go prey on other citizens in other states. However, any person in Maryland that has a bank account and a computer can still get cash advances.
The regulators can’t regulate virtual businesses without an address.
Maryland and other states are beginning to investigate the role that traditional banks play in making these predatory loans possible. The loans have to have a bank to back them.
For example, the Automated Clearing House Network is what allows traditional banks the authority to automatically withdraw funds directly from a person’s bank account. These predatory lenders or cash advance businesses must have access to this network to operate, so they have to work in conjunction with these traditional banks.
Federal regulators have also gotten involved and have warned the traditional banks about the payday loans.
One of the financial regulators in New York sent letters to more than 117 banks asking them what role they were playing in stopping illegal payday loan companies from coming into the state.
The banks that payday lenders use have access to a network that has the authority to automatically withdraw monies from a consumer’s account.
These institutions are not located in the state of Maryland, so it has made it a little more difficult to get them. However, the banks that participate in these practices are being identified and the names turned over to federal regulators.
The interest rates on payday loans are truly astronomical. For instance, yearly interest rates can be as much as 700%.
These loans allow consumers to borrow against their paychecks in advance. The quick cash does not come without serious consequences. The fee on these payday loans are very high, and the amount of time to pay back the loans is a short time frame. As a result, consumers often end up renewing the loans.
Maryland is one of a few states in the United States that put an end to these predators in their states. One way Maryland put an end to these predatory loans is the cap they put on interests rates on all loans in the state. No lender can charge an interest rate higher than 33%.
Payday loan regulation in Maryland is meant to protect consumers, but the sneaky payday loan predators are still able to get to Maryland’s consumers. These cash advance places are operating a lot like credit card companies. For example, you can live in one state and receive a credit card application from a bank in another state.
Payday loans are meant to keep a person afloat until their next paycheck. Generally, the amount ranges from $100 to $500. These loans are short term solutions that can quickly turn into a long term debt that is hard to pay off.
The payday loan lenders will connect you with a state does not prohibit payday loans. The popularity and convenience of the internet allow payday loan lenders the ability to operate 24/7. They are able to bypass payday loan regulation in Maryland.
Payday loan applications online can be approved as quickly as 90 seconds. Your payday loan can be put into your account within an hour or even less time. Ultimately, it is all about choice. Consumers with low credit scores should have a choice about borrowing money even though the interests rates are astronomical. Maryland and other states are simply trying to protect their citizens from being taken advantage of and becoming a debt slave to these unscrupulous lenders.
Nevertheless, people still can get the cash advances online, and there is not anything that can prohibit this at this time. Maryland has stood up for the citizens in that state to let cash advance companies know that they cannot open up shop in their state and take advantage of their people.