Department of Financial Institutions
Payday Lending Database Set to Launch
FRANKFORT, Ky. – (April 30, 2010) – A new online, real-time payday lending database that will ensure lenders are complying with state law by limiting the number and amount of payday loans to consumers goes live today – well ahead of the July 1, 2010 mandate.
Since 1998, Kentucky Revised Statute Chapter 286.9 has limited customers to two transactions at a time totaling $500. The term can range from 14 to 60 days and the fee can be up to $15 per $100 borrowed. However, there has never been a tracking system to verify, in real time, that a borrower has no more than the allowed transactions and amount. During the 2009 session of the General Assembly, Kentucky lawmakers approved the legislation creating the database, which will be monitored by the Kentucky Department of Financial Institutions (DFI).
“The General Assembly has provided the department with an important enforcement tool,” said DFI Commissioner Charles Vice. “This database will improve transparency, monitoring and data collection.”
The Kentucky Deferred Presentment Transaction System is a secure, online database at www.kydpp.com, constructed and maintained by Veritec Solutions LLC, the third-party provider secured by DFI.
“This statewide database will make it possible to accurately track whether customers have multiple loans and to ensure the loans comply with the state law,” said DFI’s Non-depository Division Director Nicole Biddle. “Customers who exceed the limit will not be able to obtain a new payday loan until they pay off prior loans to a point where they become eligible.”
Customers with questions about the system or the status of their payday loans can call Veritec’s toll-free customer call center at 877-KY-DPP01 (877-593-7701). Initially, the call center will be open from 9 a.m. to 6 p.m. Monday through Friday and 10 a.m. to 3 p.m. on Saturday.
Consumers who would like assistance with developing a budget or debt repayment plan may contact the Consumer Credit Counseling Service (CCCS)/Apprisen Financial Advocates, a nonprofit community service and member of the National Foundation for Consumer Credit. To arrange a free, confidential counseling session at any of the nine Kentucky offices, or via phone or e-mail, call toll-free 800-355-2227 or visit www.apprisen.com.
For more information about 2009’s House Bill 444, which required implementation of the database, visit www.kfi.ky.gov/nondepository/hb444.htm. Consumers who would like to file a complaint against a payday lender or other financial institution may fill out a DFI complaint form at www.kfi.ky.gov/complaint/ficomplaint.htm or call 800-223-2579.
DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents and protect their financial interests by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.