One of our stores was also examined this week. Our Examiner said
there wasn't a problem with extending loans at the customer's
request as long as there were no additional fees. The examiner
told us that a short extension did not need to be in writing.

CDDTL act discussed. (Our examiner repeatedly said the DOC is
taking this "position" on the CDDTL.)
1. We were told that if a payday advance check is returned from
the bank, the DOC's position is that we cannot redeposit the check
at any time without the customer's written and dated permission to
do so. This written approval statement needs to include the amount
of the redeposit, date of the redeposit as well as the proposed
method - either deposit it in the bank or ACH the check. And, we
were told that it doesn't matter what the contract says either. I
asked what other recourse we would have for collecting bounced
checks if a customer refused to sign a statement allowing us to
redeposit the check on their next payday. The response was "none,
except you could take them to Small Claims Court". The examiner
agreed that this would put additional hardships and expense on the
customers, but said that is how the DOC is interpreting the law.
This would be horrible for the customers, not to mention an
increased burden on Small Claims Courts.

2. The examiner reiterated the DoC's position that all payment
were also told that there is a distinction between working out a
payment plan with a customer and accepting a partial payment while
pursuing collection efforts. If a customer makes a partial payment
on a loan, and the operator continues to pursue collecting the full
remaining balance due, this is a collection effort - not a payment
plan. Accepting the customer's payment would not require a written
statement from him or her. The examiner did suggest we send a
follow-up letter to the customer detailing the acceptance of a
partial payment and make notes in the customer's filedocumenting
any pertinent discussions.

Finally, another question arose during the exam that went
unanswered. If an operator agrees to a payment plan and documents
it with the customer, does this loan then become an installment
loan and not a payday advance? In other words, would this loan
then be subject to licensing or legal requirementsthat are outside
the CDDTL, for example lending laws?

Based on the "positions" taken by the DoC on collecting bad checks,
I believe in the long run they will end up doing more harm to the
customers than good. This is an unfortunate situation that I hope
gets resolved quickly - for everyone's sake.