Payday and Money Tree Loans and Your Rights in Vancouver, Washington

If you are a resident of Vancouver, Washington, you are a part of a thriving city that has a diverse population and buzzing economy. However, despite its growth and development over the years, many residents still face financial challenges that lead them to seek out payday loans as quick solutions for immediate expenses. Does this sound like you?

Payday loans and services like Money Tree are concentrated in commercial areas, making them easily accessible to the locals. These locations often attract those who need urgent financial assistance and contribute to the prevalence of payday lending in the area.

However, Vancouver also offers many resources to help you through your finances and find alternatives to these high-interest loans. Even Vancouver attorneys with decades of experience can step in and advise you on the best steps to take to help drag you out of the debt cycle you may currently find yourself in.

Payday loans are short-term, high-interest loans intended to cover unexpected expenses until you receive your next paycheck. Money Tree loans, offered by the Moneytree financial services company, include payday, installment, and title loans. While these services may seem like a financial lifeline you can take quick and convenient advantage of, they often lead you into cycles of debt due to the high interest rates and fees attached to them.

In Clark County, payday loans are readily accessible, with lenders operating in both physical locations and online platforms. Vancouver residents frequently turn to these options for immediate cash needs for those unexpected times in life that result in emergency medical bills, car repairs, or overdue utility payments.

The payday lending industry is regulated in Washington under the Washington State Consumer Loan Act (RCW 31.45) and the Payday Lending Act (RCW 31.45.073). These laws establish key rules for payday lenders operating in the state to ensure transparency and consumer protection.

• Loan Amount Limits: Payday loans are capped at $700 or 30% of your gross monthly income, whichever is less.
• Loan Terms: The maximum loan term is 45 days, and lenders cannot issue loans with terms shorter than your next payday.
• Fees and Interest Rates: Lenders can charge a fee of up to 15% of the first $500 borrowed and 10% for amounts over $500. The effective annual percentage rate (APR) often exceeds 391%, making these loans one of the most expensive credit options available to Vancouver residents.
• Loan Rollovers: Rollovers or loan renewals are prohibited, meaning you can’t extend the loan’s term by paying additional fees.
• Repayment Plans: If you can’t repay your loan on time, you are entitled to a no-cost installment repayment plan. This plan must allow payments over 90 days without additional fees or interest accruing.
• Number of Loans: You can’t take out more than eight payday loans within 12 months.
• Lender Licensing: All payday lenders in Washington must be licensed by the state’s Department of Financial Institutions (DFI).

Again, while these loans may offer you immediate financial relief, you still need to keep in mind that they come with several risks.

• Debt Cycles: Many often find themselves struggling to repay these high-interest loans, leading to a cycle of borrowing and mounting debt that is hard to come out from.
• Legal Action for Non-Payment: Lenders can pursue legal action against you if you end up defaulting on these loans. While Washington law prohibits criminal prosecution for unpaid loans, civil lawsuits can result in wage garnishment or liens.
• Impact on Credit Scores: Typically, payday lenders don’t report payments to credit bureaus. However, defaults may be sent to collection agencies, negatively impacting your credit scores.
• Predatory Lending Practices: Some lenders have been found to mislead people about the loan terms. They may also engage in aggressive collection tactics that lead them to violate consumer protection laws.

Clark County residents should explore safer financial options to avoid the drawbacks of payday lending.

Local credit unions like iQ Credit Union and Rivermark Community Credit Union offer small-dollar, low-interest loans to their members.

Installment loans, available through licensed financial institutions, provide a structured repayment plan with lower interest rates, potentially making the loan much more manageable.

Organizations like Clark County Community Services offer emergency assistance programs to help Vancouver residents cover essential expenses without having to resort to payday loans.

Some employers in Vancouver provide payroll advances as a benefit to employees facing financial hardship.

Charitable organizations, such as the Salvation Army Vancouver Corps, provide financial aid for utility bills, rent, and groceries.

If you find yourself encountering issues with payday lenders in Vancouver, you have a few legal options to explore to safeguard your rights. One of the most effective steps is filing a complaint with the DFI.

The DFI is responsible for investigating the claims made against licensed payday lenders, especially in cases where state laws are violated. This ensures that all lenders adhere to regulatory standards. You can find more about this under RCW 31.45.

Let’s say a lender violated this law by charging excessive fees or failing to comply with a repayment plan. In this case, you can submit a formal complaint to the DFI.

The Truth in Lending Act (TILA) (15 US Code 1601) mandates that lenders disclose all of the information regarding the loan upfront, ensuring transparency. This means they need to disclose information relating to the total loan amount, fees, repayment deadlines, and the annual percentage rate (APR). This way, you have the chance to fully understand the financial obligations you are agreeing to before you even sign the contract.

The Fair Debt Collection Practices Act (FDCPA) under 15 US Code 1692 also safeguards you from abusive or deceptive collection tactics. For example, collectors can’t threaten you with jail time, use profanity, or contact you at odd hours. If you experience violations like this, you can file a complaint with the Federal Trade Commission (FTC) or seek legal remedies through a civil lawsuit.

Washington state provides additional safeguards under RCW 31.45.200, limiting how payday lenders can collect debts. Lenders are prohibited from:

• Making unauthorized withdrawals from borrowers’ bank accounts
• Misrepresenting loan terms or repayment requirements
• Charging fees beyond the limits established by state law

Washington law mandates that payday lenders offer you a no-cost repayment plan if you are unable to repay a loan on time. Under RCW 31.45.084, the plan must allow for repayment over 90 days in installments without any additional fees or interest. It also requires lenders to notify you of this option before initiating any kind of collection activities.

Payday loans can prove to be a lifeline when you find yourself in financial need but can lead to some serious issues down the line. For this reason, you want to be as educated as possible when it comes to how these loans work and what protections you have.

Yes, payday loan lenders in Washington state can request wage garnishment if you fail to repay the loan. However, the process is regulated by state law. Under RCW 19.16, lenders must first obtain a court judgment before garnishing any of your wages. This means they can’t automatically take funds from your paycheck. If you face wage garnishment, you have the right to challenge it in court and may be able to negotiate a repayment plan.

Payday loan extensions are generally not allowed in Washington. If you find you can’t repay the loan by the due date, the lender must offer a 90-day repayment plan under RCW 31.45.084.

While payday lenders are prohibited from rolling over the loan into a new loan with additional fees, the repayment plan allows you to spread out the loan repayment without additional charges, giving you more time to repay the amount you owe on the loan.

In some cases, payday loans can be discharged in bankruptcy. Consult with a Vancouver bankruptcy attorney who can assess your situation if you are considering bankruptcy due to payday loan debt. Chapter 7 bankruptcy can allow you to discharge certain payday loan debts, while Chapter 13 bankruptcy can help you reorganize your debt and create a repayment plan.

Despite the challenges payday loans can bring, Washington state laws and federal regulations will protect you and provide what you need to resolve disputes and hold lenders accountable.

If you are facing issues with a payday loan in Vancouver, Washington, don’t hesitate to reach out to a qualified attorney in the area with expertise in these matters. They can help you get started on the steps you need to take toward resolution and get you back on track.