Payday loans, also called "cash advance loans," "check advance loans," or "deferred deposit check loans," are a frequent pitfall for consumers. A fee anywhere from $15-$30 per $100 borrowed is charged for an average loan of $300. The borrower will give the lender a post-dated check, which the lender later uses to electronically transfer a payment or the entire balance of the loan from the borrowers account. If the payday loan is transacted on the Internet, the borrower gives the payday lender authorization to access the borrower's checking account via the ACH system.
I have no love for payday lenders in general, or banks offering Internet payday loans in particular.
However, your major thesis is First Bank of Delaware must be licensed in California to transact business with California residents. That is not true because the bank has no branches or agents in California, as far as I can tell by reading the bank's 2009 10-K. A state or federally chartered bank, thrift, savings association, industrial loan company or credit union is not subject to the California Deferred Deposit Transaction Law.
Your minor thesis is all California payday lenders must be licensed by the state. That may or may not be true, but it is irrelevant for First Bank of Delaware because it has no branches or agents in California, as far as I can tell, and is a Delaware-chartered bank.
Your conclusion — a loan contract with First Bank of Delaware is illegal and unenforceable in California because First Bank of Delaware is unlicensed in the state — is not supported by your arguments. I am unable to find any California court cases regarding First Bank of Delaware on this question. (Readers, please provide citations if you do.)
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