Washington Governor Gregoire

Washington State Governor Gregoire signed a new law today that restricts check cashers’ and payday lenders’ ability to collect on consumer debts. Payday Loans have gotten a lot of attention in the Washington Legislature this month, but this bill is very interesting in its definition of “harassment.”

This bill has some relatively benign elements, such as making it illegal for payday loan companies to impersonate a police officer and make false threats to consumers. I’m pretty sure these are already illegal activities in all 50 states, right?

Yet, this bill also bans the so-called “field calls” frequently used by payday loan collectors. Employees of payday loan companies often take off into “the field,” showing up at consumers homes or places of work, usually delivering a letter that notifies them of their payday loan debt. This is the definition of harassment, since the same payday companies have already called 2-3 times per day to remind the customer that they have fallen behind on their payday loan. It is good to see this horrible collection tactic put out of commission in Washington, at least for payday loan collectors.

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