Loan stores fined by state
Moses Lake branches checking loan records
MOSES LAKE — Advance Til Payday and Zippy Cash — loan companies with branches in Moses Lake — may see their licenses revoked by a Washington state agency.
The state Department of Financial Institutions (DFI), regulator of banks, credit unions, mortgage brokers and securities dealers, slapped the "payday" lending companies with a record $1.2 million in fines Thursday.
DFI filed charges against Advance Til Payday, owned by Loren C. Gill and Daniel Van Gasken, and Zippy Cash, owned by Van Gasken.
Zippy Cash, with six stores licensed for business throughout Washington was fined $471,600. Advance Til Payday, with 27 stores, was fined $557,800 by the state. They both face being banned from the lending industry.
Charging documents detail numerous allegations of misconduct, including 400 loans in excess of the state's maximum of $700 per customer.
The companies may request a hearing to defend the charges.
Customer complaints prompted the state to investigate, said Deb Bortner, acting director of DFI's division of consumer services. DFI will investigate additional complaints and discipline violators of the state's payday lending laws, she said.
"We will not tolerate payday lenders harming consumers by overstepping the legal limitations set by the Legislature," Bortner said.
The Legislature set limits to keep borrowers from falling into inescapable cycles of debt, she said.
In Moses Lake the two companies are neighbors, with Advance Til Payday at 717 W. Broadway Ave. and Zippy Cash at 727 W. Broadway Ave. Bortner was not aware of either store exceeding loan limits. The agency has not received complaints about the Moses Lake stores, the director said.
Both companies must now check the records of their branches, including in Moses Lake, to prove individual customers did not exceed the $700 limit.
"(Lending companies) choose to either follow the law or not follow the law," Bortner said. "Like many other things, if you don't follow the law you don't get to stay in business."
The state did on-site examinations of the companies' stores in Puyallup, Tacoma, Olympia, Lacy and Shelton.
Advance Til Payday and Zippy Cash allegedly allowed individual customers to borrow thousands of dollars, according to DFI investigators.
The state claims, in one alleged example of misconduct, a customer borrowed $1,700 in a two-day period in January 2005, taking two $500 loans and one $700 loan from three separate Zippy Cash branches in Tacoma and Lacy.
In a similar fashion, Advance Til Payday allegedly made loans totaling as high as $3,450 to individuals, according to the state.
In several examples listed in charging documents, customers took out multiple loans on the same day they paid off others, turning short-term loans into long-term debt. Lenders are allowed to charge $95 interest on each $700 loan.
The companies are being ordered to pay restitution to customers. The state is also charging for the cost of the investigation.
The state's probe found Gill, owner of Advance Til Payday, was permanently banned from the small-loans business in Virginia in 1993. They found he was convicted of assault in July 2005 in Pierce County Superior Court. He failed to reveal either fact to the state as required, the charging documents state.
Gill was reached by phone Friday, but declined comment.
Attempts by the Columbia Basin Herald to reach Van Gasken for comment were unsuccessful.