HARRISBURG, Pa. — Ruling on a complaint brought by the state banking department, a state court Tuesday barred Advance America, the nation's largest payday lender, from offering its $500 "Choice Line of Credit" requiring a $149.95 monthly "participation fee" and 5.98% interest rate.
In its decision, Commonwealth Court ruled the product violates the state's Consumer Discount Company Act protecting borrowers from what it called "exploitive lending practices".
"The court has ordered this product taken off the market and for that I am thankful," said acting Banking Secretary Victoria A. Reider. "When the governor announced this suit, he called the product 'outrageous' and 'one that took advantage of hard pressed families.'"
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Reider said the court's decision "is a victory for those families." Reider said she will seek restitution through the court requiring Advance America to repay consumers.
A spokesman for Advance America, which operates 100 offices in Pennsylvania and began offering "Choice Line" in June 2006, was not immediately available for comment.
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