‘Predatory Puppy Loans’ Exploit NJ Consumers

When high-cost funding is issued for the purchase of living things, something must be done, say advocates across the country.

According to groups, to circumvent state law in New Jersey and elsewhere, a lender is using a Utah-based bank to provide “predatory” loans to people looking to buy puppies from the store.

The Garden State has a standard consumer loan rate cap of 30%, but thanks to the route taken by lender EasyPay Finance, pet loans can be issued with APR rates of 130% to 189%, according to a campaign launched by Consumer and Animal Welfare. lawyers in February.

By partnering with a bank, in this case Transportation Alliance Bank, EasyPay can avoid state interest rate laws, the groups noted.

Documentation sent to New Jersey 101.5 shows a 2019 financing receipt from a pet store in Union, which required the consumer to repay over $7,500 over 2 years for a $2,500 loan.

“The practice of bank leasing is happening here in New Jersey and we are deeply concerned about it,” said Beverly Brown Ruggia, financial justice program director for New Jersey Citizen Action.

The campaign urges TAB to stop helping EasyPay “exploit our most vulnerable residents in the state and the animals used to lure those residents into debt traps.” The groups are also asking the FDIC, which oversees financial institutions, to stop the TAB from “facilitating this circumvention of New Jersey law.”

Lenders like EasyPay offer financing at places like pet stores, auto repair shops, and furniture stores. EasyPay processes loans via TAB in 32 states where its interest rates are illegal, and directly to consumers in states that allow high rates, advocacy groups say.

“Only a few rogue banks are prepared to deal with predatory practices lenders,” the National Consumer Law Center said in a news release.

When contacted for comment, a company representing TAB referred New Jersey 101.5 to a blog post on TAB’s services. In it, the bank noted that traditional loans may not be an option for a number of US citizens.

“An unsecured, short-term loan could serve as a vital lifeline for a family or individual in crisis,” the message read. “For these reasons, TAB Bank offers these individuals a significantly better alternative to a payday loan, as a way to provide them with a viable bridge to a better financial future.”

EasyPay could not be reached for comment.

Brown Ruggia added that potential buyers can also play a role in limiting the practices of some lenders.

“I think the important message here is that consumers really need to take a moment, walk away from the registry, and make sure they understand the terms they’re signing up for, for any type of financing,” he said. she stated.

Dino Flammia is a reporter for New Jersey 101.5. You can reach him at din[email protected]

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