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ThinkCash in Kentucky

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Mark Cappel
UpdatedMay 10, 2024
Key Takeaways:
  • US banking laws allow banks to transact business outside of their state.
  • Storefront payday lending is a regulated activity in Kentucky.
  • Kentucky considers Internet payday lending illegal.

Can Think Cash do business in the state of Kentucky legally?

Can Think Cash do business in the state of Kentucky legally?

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.

US banking laws allow banks to transact business outside of their state and use the banking rules and laws that apply in the bank’s home state. That is how people residing in states that outlaw payday loans find these loans.

First Bank of Delaware, a relatively small bank based in Delaware, operates a payday loan business online under the ThinkCash brand name. According to the bank’s 2009 10-K statement, it has no physical presence outside of Delaware. It is a state-charted, and not a nationally charted "NA" bank.

Storefront payday lending is a regulated activity in Kentucky. It is, therefore, legal if the payday lender follows Kentucky law.

Your Question

Your question asks me to make a conclusion regarding the legality of a bank operating in Kentucky. States cannot regulate nationally chartered banks. However, I cannot see how a state can regulate the online activity of a state bank that has no physical presence in the local jurisdiction. However, the Kentucky Department of Financial Institutions FAQ page reads in part, "Internet payday lenders are not regulated in the state of Kentucky and are therefore illegal."

The Kentucky Department of Financial Institutions considers ThinkCash’s lending is illegal if it occurs in Kentucky. However, I am curious to learn how Kentucky enforces this ban, given the ephemeral nature of the Internet.

If you are considering a payday loan, whether through a storefront payday lender or otherwise, I urge you to consider a short-term loan alternative.

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



Did you know?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2023 was $17.503 trillion. Auto loan debt was $1.607 trillion and credit card was $1.129 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Wyoming, 12% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 3%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.



KKentucky Resident, Nov, 2010
I live in Kentucky and have had 2 previous loans with Think Cash. I am currently on the third. I recently discovered that internet payday loans and payday installment loans are illegal in Kentucky. I have written and email them numerous time asking for their license number showing proof to do business with a Kentucky resident. They have yet to provide this info. They do stae they are back by the First Bank of Delaware and that the loan is legal. Payments have been ach'd from my checking every payday until recently in which I have a block on the account. If they are legally doing business why won't they provide the license number? I have filed a complaint with the FDIC and also Federal Trade Commission. I am in the process of filing complaints with the Kentucky Attorney General's Office and also the Delaware Attorney General's Office. Do you know if they are legal to do business with Kentucky residents?
BBill, Nov, 2010
If ThinkCash's activities fit the Kentucky definition of a payday lender, and in my opinion they do, then it is violating Kentucky law when it does business with Kentucky residents because it has no Kentucky license. However, my opinion and $5 will get you a vente latte and nothing more. Consult with a Kentucky lawyer who has experience with civil litigation or consumer law about your potential liability for these debts. He or she will need to research Kentucky law to learn if Kentucky courts enforce contracts signed with unlicensed lenders.