Agency under fire for not properly regulating payday lenders - KNOE 8 News; KNOE-TV; KNOE.com |

Agency under fire for not properly regulating payday lenders

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 MONROE, La. (KNOE 8 News) - How many of you have taken out a payday loan? Some of you may on a somewhat regular basis.

Well, a new report suggests the agency in charge of lender oversight may not be doing its job, which leaves you , the consumer, vulnerable to improper practices.

Driving down Louisville Avenue, you will see several payday lenders within the first six blocks. Some are even located next door to each other. And while most consumers would expect this industry to be heavily regulated, a recent report by the Louisiana Legislative Auditor Daryl Purpera says the Office of Financial Institutions is not adequately doing its job.

The auditor sighted several key finding including poor record keeping, the inability to identify illegal activity and not imposing fines on violators.

"Penalties are certainly set up to deter violations. Over 8,000 violations in a 3-year period, and we didn't see any penalties being assessed. So that wouldn't be creating an atmosphere for deterring violations," Purpera said.       

We asked our viewers on Facebook about their experiences with payday lenders.

One says he paid a $100 dollars a month on $750 loan for 15 months.

 This made his total amount $1,500, double the amount of the loan.

 But another view says she borrowed $250 and only had to pay back $300.

She said she used the service to pay her electricity bill that was higher than normal one month. She said taking out the loan was cheaper than paying a new deposit and re-connection fee to her electricity company.

And even though it's the payday lenders who usually get the bad rap, in this case, it’s the government agency in charge of keeping them in line.

In a statement, the office of financial institutions says it is looking over the auditor's findings and taking the necessary steps to correct the problems.
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