From AFR: Stop The Debt Trap - Payday Lending in the News.

For more recent press hits worth sharing, check out#StopTheDebtTrap News Stories! Highlight Federal judge rejects CFPB's effort to halt payday rule June 13, American Banker A federal court dealt a blow to efforts by the Consumer Financial Protection Bureau to slow down the agency's payday lending rule. U.S. District Judge Lee Yeakel on Tuesday denied the request by acting CFPB Director Mick Mulvaney that the court delay the payday rule's effective date, which is set for next year. More Coverage: CFPB Payday Rule Will Go Live Next Year, Judge Says | Bloomberg Texas Court Rules Against CFPB’s Payday Lending Act Delay | PYMNTS.com Tweet: "Mick Mulvaney and the payday lenders tried an end-run around the law and it was rightly rejected," said Will Corbett, litigation counsel @CRLONLINE. "Today’s ruling is a win for consumers." #ProtectConsumers #StopTheDebtTrap http://bit.ly/2K6AWX4   Other News    Legal Aid official describes firing of advisers to federal consumer board June 17, The Florida Times Union Over 60 members of the Consumer Financial Protection Bureau’s three advisory boards comprised of volunteers from industry and consumer groups as wells as academics were all fired recently. White House Confirms That Mulvaney Deputy Is Pick to Lead Consumer Bureau June 16, The New York Times Mick Mulvaney, the White House budget director and acting head of the Consumer Financial Protection Bureau, has picked a deputy at the budget office, Kathy Kraninger, to succeed him at the consumer watchdog agency, a White House spokeswoman confirmed on Saturday. REPOST: WRAL.com More Coverage: Trump's consumer watchdog pick draws criticism from left and right | Reuters President Trump To Tap Mulvaney Associate To Lead Consumer Bureau | NPR Pa. lawmakers should reject this exploitative payday lending bill June 15, Harrisburg Patriot News It's the rare day that goes by in Harrisburg when state lawmakers don't praise the virtues of Pennsylvania's active-duty servicemen and women and its veterans. Yet a nakedly exploitative bill now before the House Commerce Committee, if approved, would open a loophole in state law big enough to drive an Abrams tank through, trapping those same heroes in a crushing cycle of debt. More Coverage: Reject legislation to aid payday lenders | The Morning Call Rep. Heffley accused of sneaking payday lending bill through committee | City & State CFPB’s Acting Director Is Acting Up: Mulvaney Joins Payday Industry to Fight Regulation June 13, The Pasadena Journal Mick Mulvaney, the illegally appointed Acting Director of the Consumer Financial Protection Bureau (CFPB) is a glaring example of one who appears to consistently relegate the financial concerns of America’s people in favor of businesses that harm instead of help consumers. His support of the payday and small-dollar lending industry is a prime example. In Our View: We’re Inviting Another Crisis June 12, The Columbian With the nation barely out from under the shadow of the Great Recession, the Trump administration and a complicit Congress continue to ignore the lessons of the past decade. Safeguards put in place to protect against another economic meltdown are being rolled back, while protections for consumers are being ignored. For more recent press hits worth sharing, check out#StopTheDebtTrap News Stories!

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Department of Justice

U.S. Attorney’s Office

Eastern District of Pennsylvania

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FOR IMMEDIATE RELEASE

Monday, December 11, 2017

North Dakota-Based Payment Processor Pleads Guilty To Facilitating Illegal Payday Lending Across The United States

PHILADELPHIA – Intercept Corporation, d/b/a “InterceptEFT” (“Intercept”), a privately held corporation headquartered in Fargo, North Dakota, has pleaded guilty to an Information charging the company with operating an illegal money transmittal business, announced United States Attorney Louis D. Lappen.

Intercept was a “third party payment processor” which processed electronic funds transfers for its clients through the Automated Clearing House (“ACH”) system, an electronic payments network that processed financial transactions without using paper checks.  Among Intercept’s clients were numerous business entities that issued, serviced, funded, and collected debt from short-term, high-interest loans, commonly referred to as “payday loans,” because such loans are supposed to be repaid when the borrower received his or her next paycheck or regular income payment.  Payday loans are effectively illegal in more than a dozen states, including Pennsylvania, and are highly regulated in many other states. 

Various payday loan companies hired Intercept to move large sums of money between the bank accounts of the payday loan companies and their borrowers.  These money transfers included the funding of payday loans by the companies to the borrowers, and the collection of loan proceeds from the borrowers to the payday loan companies.  Among the payday loan companies that employed Intercept to collect payday loan debt from borrowers who resided in states where such loans were illegal, and in states where there such loans were regulated, were payday companies owned, operated, controlled, and financed by Charles M. Hallinan (recently convicted of illegal payday lending by a federal jury in the Eastern District of Pennsylvania), Scott Tucker (recently convicted of illegal payday lending by a federal jury in the Southern District of New York) and Adrian Rubin (who pleaded guilty to illegal payday lending in the Eastern District of Pennsylvania).

Intercept used the ACH system to transfer funds to and from the bank accounts of borrowers located across the United States, including hundreds of thousands of customers who lived in states that outlawed and/or regulated payday loans.  No later than May 2008, Intercept was made specifically aware that one of Intercept’s payday lending clients made a payday loan in violation of Connecticut law.  Subsequently, in June 2009, Intercept was again notified that one of its payday lending clients made an illegal payday loan, but this time, the loan was in violation of California law.  In 2012, Intercept was instructed by its bank to stop processing payments for payday lending companies for loans made to borrowers in states where such loans were prohibited or restricted.  And in August 2012, a payday lending client specifically notified Intercept’s leadership that payday loans were being made in states that outlawed payday lending, including in Pennsylvania.  Yet Intercept continued facilitating payday lending operations for its clients in states that outlawed and/or regulated payday loans until at least August 2013. 

In total, Intercept processed hundreds of millions of dollars of payments for its payday lending company clients, and earned millions of dollars in profits, as a result of assisting payday lenders in making illegal loans and collecting unlawful debt.

As a result of its criminal conviction, Intercept must pay forfeiture to the United States in the amount of all funds involved in or traceable to the charged offense (and no less than $500,000), a potential corporate fine of up to $500,000, and a $400 corporate assessment. 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, and the U.S. Postal Inspection Service.  It is being prosecuted by Assistant United States Attorneys and Mark B. Dubnoff and James Petkun.

Component(s): 

USAO - Pennsylvania, Eastern

Updated December 11, 2017