PA Banking Department Applauds Supreme Court Ruling; Will Seek Restitution From Payday Lender

HARRISBURG, Pa., May 30 /PRNewswire-USNewswire/ -- Secretary of Banking Steve Kaplan said today that the Banking Department will seek restitution on behalf of Pennsylvania customers of Advance America, the nation's largest payday lender, for fees charged in excess of state law.

The Pennsylvania Supreme Court yesterday upheld a Commonwealth Court ruling that the company's "Choice Line of Credit" violates the Consumer Discount Company Act.

"We're pleased that the court has ruled in favor of Pennsylvania consumers, many of whom were wrongly charged hundreds, potentially even thousands, of dollars," said Kaplan. "This decision paves the way for the banking department to pursue restitution for these victims."

Advance America launched the "Choice Line of Credit" in Pennsylvania in June 2006. For a monthly participation fee of $149.95, customers could borrow up to $500 at 5.98% APR. The department filed suit in September 2006, alleging that Advance America was providing lines of credit to borrowers without a license and with interest and fees in excess of state law. In July 2007, Commonwealth Court ruled that the company could no longer offer the product here.

In September 2007, Advance America announced that it would close a third of its 100 Pennsylvania stores. In December, it decided to shutter all of its remaining centers.

EDITOR'S NOTE: A copy of the Pennsylvania Supreme Court's opinion is available at www.banking.state.pa.us

CONTACT: Heather Tyler

(717) 783-4721

First Call Analyst:
FCMN Contact:

Source: Pennsylvania Department of Banking

CONTACT: Heather Tyler of the Pennsylvania Department of Banking,
+1-717-783-4721

Web Site: http://www.state.pa.us/

2008-05-30 16:17:25 0374008 PRNEWSWIRE