Because of zoning issues or necessary interest rates and fees, some lawmakers have chosen to ban the opportunity for consumers to take advantage of short term lending
when they face an emergency and need fast cash. Though a number of states have either banned or strictly regulated the industry to the point that many can no longer operate, many consumers are attempting to look for loopholes to access the popular sector. Leaders are seeing this in New York. Though consumers cannot benefit from short term loans in the state, many have turned to the internet for support during tough financial times. New Yorkers going online for fast cash
When consumers are desperate for money after an emergency, they have the option of going online to pursue a short term lender. New Yorkers can only obtain loans from traditional lenders, many of whom have a stringent application process, thereby severely restricting a consumer's options. As such, many are trying to use online lenders. "In states such as New York, customers who are faced with restricted access to credit options are currently being served by lenders who operate offshore or outside the auspices of state law," vice president for corporate communications at Cash America, Yolanda Walker, told City Limits. Even for lenders who decide not to pursue an applicant if they are from a state which has banned the borrowing options, many companies choose to send that person to a lead generator that will risk it, City Limits explained. Loans may be unlawful
In the hopes of skirting the ban on such loans, many New Yorkers employed the services of online short term lenders with headquarters in other states. However, the law is fairly vague on this practice. In 2004 and again in 2009, the attorneys general were able to successfully sue online lenders based in Nevada and Pennsylvania. Other companies choose to ignore the home state of the borrower and feel that they are safe because they are not operating in the banned area. According to WWBT-TV, Richmond, Virginia's NBC affiliate, lenders have to take extreme care when running checks on individuals who are attempting to borrow. The source said that in states where short term lending is illegal, online lenders cannot operate or they face lawsuits, if caught. It is in the best interest of a lender to deny the application of an individual from such an area, the source said, for another notable reason. Consumers, "don't have to pay back anything else because it is a void and unenforceable loan in our state, technically, they don't have to pay anything back," explained representative of the Virginia Partnership to Encourage Responsible Lending Dana Wiggins to WWBT.