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First Bank of Delaware & ThinkCash

Are ThinkCash payday loan contracts illegal and unenforceable in California?

This isn't really a question but rather a "posting" to verify some information that I've seen here related to questions/comments regarding PayDay Loan providers in the State of California. First, check your Loan Agreement. I discovered that often times what's noted as the APR % is not what's being charged. Often you may be charged more than what you agreed to. If they are charging a rate that is over the legal limit (in CA it's 460% APR), your agreement is unenforceable and, in fact, if you want, you could sue them (or take them into Arbitration) for overcharging you. Second, in the State of California, ALL PayDay Lenders must be Licensed to do business in the State (not all are). If they are NOT Licensed in the state, the agreement is VOID!  First Bank of Delaware (now known as ThinkCash) is NOT LICENSED TO OPERATE IN THE STATE OF CALIFORNIA! Not only are they not licensed in the State of California to do business as a bank, they are notorious for charging ABOVE the maximum allowable by law APR (460%) by packaging their PayDay Loans as "Installment Loans" and they spread them out over an 11 week period. Look at: DIVISION 10. CALIFORNIA DEFERRED DEPOSIT TRANSACTION LAW on the web and specifically review "Chapter 3, Division 10, Commencing with Section 2020 through Section 23106."

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Highlights

  • Payday loans are a pitfall for consumers, who are charged very high fees and rates.
  • First Bank of Delaware offers payday loans using the ThinkCash brand.
  • Because it is a chartered bank, First Bank of Delaware can operate remotely in California.

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.)

Bills.com provides Advice on Pay Day Loan Collections for people in California, Florida, Illinois, Massachusetts, Missouri, New York, Texas, and Virginia.

I hope this information helps you Find. Learn & Save.

Best,

Bill

bills.com

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13 Comments

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  • DJ
    Sep, 2012
    Donna
    Does this apply to Las Vegas, Nevada as well? I received a call on 09/24/2012, from a Kevin Turner screaming stating that I have been notified. He wants my home and work address to serve me. However, when I called the number back that he called from, it was a Realty company. I called the number that he left to call and reached Ms. Garcia that stated she is with Consolidated Firm trying to collect a debt from 2007 for First Bank of Delaware. I asked who Kevin Turner is and she stated that their locaters in the field may use their personal cell phones. I don't ever remember creating this debt, but I can't afford to be served, so I was planning to try and pay on it, but really don't have it, but she is suggesting that I ask family and friends. Ms. Garcia stated that she was putting me on hold to speak with a supervisor due to my current situation. When she came back to the phone I believed that she spoke to a supervisor, so I decided to call back and I asked to speak with the supervisor and they transferred me right back to Ms. Garcia. I asked Ms. Garcia if I could speak with her supervisor and she said that she was the supervisor assigned to my debt account. I told her, you told me you were putting me on hold to speak with a supervisor and now you tell me that you put me on hold to speak to yourself? I repeatedly asked to speak to a supervisor and still have not been able to reach one due to them not letting me past Ms. Garcia. She would not give an address to her company. This all seems quite odd to me and I cannot be sure that I created this debt. I have had my income tax folder stolen in the past from the tax company and I pressed charges, but nothing ever happened and the person was released. My ex-husband has been using my SS# as well and has credit cards with my name attached and I don't know how he is able to do that without my permission. Please help, I don't know what to do. I am a single mother with 2 daughers and I have been in and out of the hospital thoughout this year due to blood transfusions and other medical issues. Do you have any advise for me?
    0 Votes

    • BA
      Sep, 2012
      Bill
      I have several reading assignments for you.
      • Just because a screaming voice on the telephone claims you owe a debt does not make the statement a fact. Validate the debt before you pay the collection agent a dime.
      • You mentioned you have no recollection of receiving a loan from First Bank of Delaware. You may be dealing with a fake debt collector.
      • You also mentioned your ex-spouse using your Social Security number and name to open credit card accounts. What you described is identity theft. Consider placing freezes on your credit reports at Equifax, Experian, and TransUnion to prevent additional credit card or other accounts from being opened in your name in the future.

      This may seem like a daunting list of things to read and accomplish. Take each one a step at a time.

      0 Votes

  • CV
    Dec, 2011
    Candace
    I received a phone call saying that i owed a debt for a mastercard that was apparently opened in 2006. I no longer reside at this address and all my mail has been forwarded to my current address. In this phone call i am told if i don't pay 1579.64 they will take me to court and add court and attorney fees which will probably double the amount in the end. They claim they have been trying to contact me over the years but have only recently been able to contact family members to get ahold of me and tried contacting me through my employers.But i have been out of work since march and i have not heard anything from my employers that anyone has been looking for me!
    0 Votes

    • BA
      Dec, 2011
      Bill
      The first step you should take is to validate the debt. For more general information see the Bills.com page about collection advice, including the Fair Debt Collection Practices Act.
      0 Votes

  • GR
    Oct, 2011
    Glo
    I have defaulted with my loan with ThinkCash about 4 years ago after I made over $750 in payments to a $1500 loan. At that time, in between my husband and myself losing and getting work, things have been tough. It is even worse now that the IRS are taking 25% on taxes we owed back in 2007. We barely make it month and month and we have been trying to clean up our financial obligations. I recently got a call threatening that they will serve me either at home or at work. What is frightening they did mention my street so I called. After being transferred several times, I was referred to a person named John. I tried verbally to make payment arrangements but he was persistent that I pay $1300 and try to settle this by borrowing from relatives. I told him my mom is in foreclosure and have no other resource. I was willing to make payment arrangements. So I said just sue me.. He tells me that you don't want to go through that route. I was getting annoyed so I hanged up. The next day I got call. Stating that I would be served at work or at home if I don't reply. Nothing happened. Today, got the same call stating I have between 1 and 3 pm before they come and get me. I was waiting be served.. Like most of our clients.. where the hell is my subpoena? I looked at both local superior courts (Los Angeles and Orange County) to see of any pending cases are open on be behalf -- None. I did not sign or mail anything to these people or give out any of my banking info. When I goggled both numbers, one is coming out as a pay phone and the other an Indian mobile communication. The company calling is supposed to be Check System Recovery. By reading all these blogs, I have surpassed the stature of limitation. Also, why only call now after 4 years and 3 months. Should I pay or avoid the restart process?
    0 Votes

    • BA
      Oct, 2011
      Bill
      The next time the collector calls, ask for his or street address. Then send him or her a cease communications notice. If the person works for a legitimate collection agency, he or she will have no hesitation to provide a mailing address. If the person declines to identify his or her mailing address, then you are almost certainly dealing with a fake debt collector.
      0 Votes

    • BC
      Nov, 2011
      Bobbi
      I have been receiving multiple calls a day from this company that is claiming to be an attorney for Think Cash, they are telling me that I took out a loan last year in May but when she first called it was in March (so mistake there on there part), they are telling me that the money was deposited into an account that I no long have, they are saying my sister was listed as a reference and that all the correspondence was an email address that I have had for many many years. Any suggestions on what I can do.
      0 Votes

    • BA
      Nov, 2011
      Bill
      Implicit in your message is that you never applied for or received funds from Think Cash. If so, then you should not, under any circumstances, pay the collection agent anything. Bills.com is receiving a steady stream of messages from readers who applied for online loans, never received them, and then six months to a year later start receiving aggressive collection calls demanding payment. Such behavior is a scam and should be reported to the Federal Trade Commission and your state's attorney general.

      At minimum, validate the debt.
      0 Votes

  • CB
    Aug, 2011
    christie
    Very huge mistake. I borrowed $700. They wanted $700 back, then they go in your account before the day they're supposed to, then your account get messed up then they expect you to pay late fees on their mistake. They do as they please, then call asking for money threatening you that it will go on your credit, when its already on your credit before they even call you. Not a good way of helping; more hurt than gain.
    1 Votes

  • ML
    May, 2011
    Martha
    I made the huge mistake of taking a 2000.00 loan with Thinkcash...they charge 2000.00 interest. I lost my job and now they say I owe over 3000.00 after I had paid them over 2600.00
    1 Votes

    • BA
      May, 2011
      Bill
      Payday loans are offered at extremely high interest rates. If a person does not pay back the debt as agreed, the balances can mushroom, as in your case.

      I have two suggestions:
      1. Check with the Office of The Attorney General in your state, to see if there is an overall cap on interest that can be charged on a loan.
      2. It is not clear to me if you applied for your payday loan online. If you did, ask the Attorney General's office if online payday loans are legal in your state. They are not legal in all states.

      You may find that you are being asked to pay for a debt that you are not required to pay.

      0 Votes

    • TF
      May, 2011
      Trina
      I need debt relief. I am almost $35,000 in debt. Please help!
      0 Votes

    • BA
      May, 2011
      Bill
      Here are two suggestions for you to resolve your $35,000 debt:
      1. Enter your data into the Bills.com Debt Coach for a personalized, interactive review of your debt resolution options. This will help you choose the debt resolution strategy that is right for your unique circumstances and goals.
      2. Complete the Bills.com Savings Center form to receive a no-cost, no-gimmick quote from a pre-screened debt resolution provider.

      Let us know how you decide to resolve your debt issue.

      0 Votes