Sunday, September 03, 2006
Nebraska Departmentof banking seeks to revoke provisional license for check cashing business that allowed customers to rollover their loansOmaha.com Fast Money, a payday lender from Lincoln, is no longer able to offer new "delayed deposit" services because its license has expired, the Nebraska Department of Banking and Finance said Friday. An attorney for JHK Inc., which operates Fast Money at 1101 Arapahoe St., disputed the department's actions. Payday lenders loan money to people and hold on to their repayment checks until their paychecks are deposited in their bank accounts. Last year the department ordered Fast Money to show why its license should not be revoked. The action stemmed from "illegal rollovers of checks" by Fast Money, the department said, meaning that the company allowed customers to pay only a fee rather than requiring them to pay off their loans within the period set by law. The law limits the loan period so that people do not go too far into debt or pay excessive fees. In January, the department said in a press release, Fast Money agreed, without admitting wrongdoing, to pay a $10,000 fine and seek new ownership, and agreed that JHK President Jim Kyles would not participate in a delayed deposit business for five years. The department said it issued a provisional license while Fast Money's application for new ownership was being processed. In July the department denied the sale, saying the proposed purchaser, MDRC Investments Inc., was not qualified and was not familiar with Nebraska law. The department said it gave the company 30 days to find another buyer, but when that didn't happen the license expired at noon Thursday. Fast Money can collect on earlier loans but not enter new ones, the department said. A man who answered Fast Money's telephone referred questions to attorney Terry Barber, who said the department exceeded its authority by calling the license provisional and by taking other actions. Barber said the law gives the department authority only to issue annual license renewals, not provisional licenses, and Fast Money's license was issued about May 1. He said the department sent notice of a hearing in October, so it is unclear why the license would expire now. He said the rejection of the new ownership is being appealed. Mike Cameron, legal counsel for the banking department, said that the department has a practice of issuing provisional licenses in some instances, and that because the license has expired the only issue for the October hearing is whether to impose a fine based on the company's actions. He said the department has not received notice of an appeal of the sale rejection.
Posted by stan_sipple at 3:48 PM