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MAINE BUREAU OF CONSUMER CREDIT PROTECTION

35 SHS, Augusta, Maine 04333


Phone:	207-624-8527
Fax:	207-582-7699
Consumers-only toll-free:	1-800-DEBT-LAW (1-800-332-8529)

Regulators Halt Oklahoma Payday Lender

August 6, 2007

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.

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STATE OF MAINE	MAINE OFFICE OF CONSUMER
KENNEBEC, SS.	CREDIT REGULATION
	35 STATE HOUSE STATION
	AUGUSTA, ME 04330-0035



IN RE:	CEASE AND DESIST ORDER
UNITED CASH LOANS

WHEREAS UNITED CASH LOANS, a payday lender located in Miami, Oklahoma was notified by certified letter dated May 23, 2007 and a second letter dated June 20, 2007, that it was allegedly engaging in activities requiring a license as a supervised lender pursuant to 9-A Maine Revised Statutes Annotated (M.R.S.A.), Article II, §2-301 et seq.; and

WHEREAS the letter notified United Cash Loans that it must obtain a license before engaging in making loans to Maine consumers; and

WHEREAS no response to the May 23rd or June 20th letters have been received; and

WHEREAS unlicensed activity is subject to administrative, civil and/or criminal penalties pursuant to 9-A M.R.S.A. §5-201; and §5-301;

NOW THEREFORE, United Cash Loans is hereby notified and ORDERED to cease and desist all activity subject to licensing in the State of Maine, unless and until such time as a license is granted by the Administrator.

United Cash Loans is further ORDERED to immediately refund any and all interest and fees collected from Maine consumers.

United Cash Loans may request the scheduling of an administrative hearing on this order within 30 days of the date of this order by making that request in writing to the administrator, or may seek review of this order pursuant to Maine’s Administrative Procedures Act, 5 M.R.S.A. §11001 et seq.

Dated this 3rd day of August, 2007

	/s/William N. Lund
	William N. Lund, Director
	Office of Consumer Credit Regulation
	Administrator, Maine Consumer Credit Code

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The Maine Bureau of Consumer Credit Protection was established in 1975 to enforce a variety of credit-related consumer laws. The Office licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars and provides speakers to advise consumers and creditors of their legal rights and responsibilities.