The owner of two online payday loan businesses that charged interest rates ranging from89% to 169%, plus fees, will no longer be doing business inPennsylvania.

According to the state's Department Banking and Securities inHarrisburg, Pa., the Anaheim, Calif.-based companies were notlicensed by the state and made loans to more than 18,000 consumersfor more than seven years.

Those consumers are now eligible to receive restitution forbeing charged excessively high interest rates on loans that rangedfrom several hundred to several thousand dollars, Ed Novak,spokesperson for the Pennsylvania Department of Banking and Securities said.

The owner of the payday loan businesses, J. Paul Reddam, signed a consent agreement and order last weekfor violating Pennsylvania's consumer lending laws. The companiesReddam owned were CashCall Inc. and WS Funding LLC, as well asDelbert Services Corp., a Nevada-based collection agency.

The consent agreement requires Reddam to stop advertising in thestate, bans his companies from making loans to consumers for threeyears and requires modifying interest rates to 6% annual intereston outstanding loans. The agreement also mandates that Reddamrequest credit reporting agencies to remove all reports made by hiscompanies and pay the Department of Banking and Securities $1million that will be used to provide restitution to consumers.

Pennsylvania authorities said that since 2009 at least 13 stateshave taken similar enforcement or civil actions against Reddam andhis businesses. Those states were Colorado, Connecticut, Florida,Georgia, Iowa, Kansas, Maryland, Massachusetts, Minnesota, NewHampshire, New York, Oregon and Virginia.

What's more, in December 2013 the CFPB filed a lawsuit against Reddam alleging “unfair, deceptiveand abusive practices, including illegally debiting consumerchecking accounts for loans that were void.”

The Pennsylvania Credit Union Association would not commentspecifically on the state's case against Reddam but acknowledgedconsumers in the state have short-term cash needs.

“From our perspective, we know there is a need for small-dollarshort-term loans and we believe that there is a fair way to offerthose kind of loans,” Michael Wishnow, PCUA senior vice presidentfor communications and public relations said.

In 2006, PCUA launched the Credit Union Better Choice program, apayday alternative where credit unions offer borrowers a 90-dayloan with a $500 limit.

A typical $500 payday loan costs consumers $15 for every $100borrowed for two weeks, or about $450 over 90 days. A $500 CreditUnion Better Choice loan cost consumers approximately $42.50 forthe same 90 days, and at the end of the loan term, the consumer has$50 in a savings account, according to PCUA.

In addition to helping consumers build a savings habit, theprogram also provides consumers with financial education to helpthem make sound financial decisions.

Across Pennsylvania, 65 credit unions offer the Credit UnionBetter Choice service, which has saved members more than $27million since 2006 compared to using a traditional payday lendingproduct, PCUA said.